 |
This paper attempts to document and explain changes in personal beliefs after fiscal scandals leaked into the media worldwide. I use the 2016 Panama Papers scandal as a quasi-experiment. This scandal reveals tax avoidance behaviors of top-income households which placed their income in offshore companies in tax havens. The scandal is unanticipated and leaked worldwide in April 2016 by ICIJ journalists operating in various media. This analysis focuses on Europe, using longitudinal data (BES) and a rich European survey (European Social Survey, ESS). On average, I find an increase in answers agreeing that (i) workers don't get their fair share of wealth (ii) there's one law for the rich and one for the poor (iii) government should redistribute from the better to the worse off. I find that the leak affects the nature of average answers up to the point that post-leak, individuals decide to take a stand on redistribution question: averages go from “neither agree nor disagree” to ``agree” for the points (i) and (ii). However, this effect is not observed for all questions on redistribution: more precisely, post-leak, less people think that making equal incomes should be a priority. This implies that wage-level inequality isn't perceived to be a priority, and suggest that the leak influences only the perception of top incomes, i.e. distribution inequality. To complement this analysis, I resort to a difference-in-differences methodology, where the control group encompasses those who are not informed. European data shows consistency at the European level.
