A taste for taxes: Minimizing distortions using political preferences.

We conduct an experiment with online workers to assess whether the distortionary effect of a tax is sensitive to the ideological match between taxpayer and tax expenditures. We find that, among self-identified political moderates, the labor supply elasticity with respect to the net of tax wage is significantly smaller when individuals pay taxes to a favored government agency as compared to an unfavored one. While the tax has a significant distortionary effect in the latter case, with a point estimate for the labor supply elasticity of approximately 0.77, the elasticity point estimate is close to zero when taxes go to a favored agency. There is also an increase in total output for the matched population among moderates. There is no evidence that these effects hold for self-identified liberals or conservatives. [ABSTRACT FROM AUTHOR]

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