Redistribution & the New Fiscal Sociology: Race and the Progressivity of State and Local Taxes Rourke O’Brien, Harvard University1 Abstract: States redistribute wealth through two mechanisms: spending and taxation. Yet, efforts to delineate the determinants of redistribution often focus exclusively on social spending. This article aims to explore how one important determinant of redistributive social spending—racial composition—influences preferences for and the structure of tax systems. First, using fixed- effects regression analyses and unique data on state and local tax systems, we demonstrate that changes in racial composition are associated with changes in the progressivity of state and local tax systems. Specifically, between 1995 and 2007, an increase in the percentage of Latinos in a state is associated with more regressive state and local tax systems as well as higher tax burdens on the poor. Second, using evidence from a nationally representative survey experiment, we find that individual preferences for taxation are actively shaped by the changing racial composition of the community. Finally, we show that in-group preference—or feeling “solidarity” with neighbors—is a key mechanism through which racial threat shapes preferences for taxation. By providing empirical evidence that racial composition drives preferences for taxation at the individual level as well as the structure of tax systems at the state and local levels, this paper serves as an important contribution to our understanding of welfare state policy and the determinants of redistribution as well as the broader project of the new fiscal sociology. 1 Direct all correspondence to Rourke O’Brien, Harvard Center for Population and Development Studies (
[email protected]).