A Study on the Effect of Political Ideology and Income Level on Taxpayer’s Perception of Exchange Equity

This study analyzed how an individual’s political ideology and income class affect the perception of exchange equity for the tax system of their society using NaSTaB (National Survey of Tax and Benefit) database from 2017 to 2021. The main findings of the empirical analysis were as follows. First, political ideology was a significant determinant of tax exchange equity perceptions. Individuals with conservative views tended to perceive lower exchange equity in taxation, while those with liberal views tended to perceive higher exchange equity. Second, income class was also a significant factor of tax exchange equity perceptions. Individuals with high income tended to perceive lower exchange equity in taxation, while those with low income tended to perceive higher exchange equity. Third, the interaction between political ideology and income class was explored by dividing the respondents into nine groups based on these two factors. The results showed that the perception of exchange equity in taxation decreased as political conservatism and income level increased. However, an exception was found for the group with conservative views and low income, who perceived high exchange equity in taxation, and for the group with liberal views and high income, who perceived low exchange equity. These findings suggest that political ideology influences individuals’ perceptions of tax exchange equity, but economic interests based on income may override ideological preferences when they are in conflict.