Determination of society's preferences about optimal taxation: The case of Turkey

Abstract

Optimal taxation is a normative field of study that develops concerning welfare economics. Welfare economics focuses on the desirability of alternative policy proposals by society and aims at maximizing social welfare. From this point of view, optimal taxation also explores the desirability of various tax policies by society. Optimal taxation is defined as the taxation that best reflects the choice of society between efficiency and justice, as well as achieving sufficient income to meet the need for public finance. The relationship of change between efficiency and justice makes it inevitable to establish an acceptable equilibrium between these two criteria. The equilibrium between efficiency and justice should be based on preferences of society. It is accepted that the tax policies applied for the preferences of society about taxation provide the best for social welfare. From this point of view, the aim of the study is to perceive the preferences of the society about taxation. This purpose has tested by a survey conducted in Turkey. The survey method was used in the research, and the data were included in the analysis through the Statistical Package for the Social Sciences (SPSS) package program. Correlation and regression analysis were performed in this context. As a result of the analysis, it was determined that preference of the society for optimal taxation was based on justice-based tax policies. Therefore, tax policies, which premise justice in taxation and aim to reduce inequality in income distribution, are considered as optimal.