Skip to main content

On the Regressivity of Gambling Taxes in Switzerland

Summary

In this study, the author assesses whether the gambling tax in Switzerland is regressive using a large, representative sample of the population and the reported gambling expenditures of the Swiss Health Survey 2007 (SHS 07). To analyze the tax incidence, the Suits index was constructed. This result is supported by a regression analysis, which highlights the income elasticity of gambling expenditures The two measures provide converging results and demonstrate the regressive pattern of the gambling tax in Switzerland As such, this taxation structure contributes to increased income inequality in Switzerland.

References

  • Abbott, M. W., and R. A. Volberg (2000), Taking the Pulse on Gambling and Problem Gambling in New Zealand: A Report on Phase One of the 1999 National Prevalence Survey, Wellington, New Zealand: Department of Internal Affairs.

    Google Scholar 

  • Abt, V., J.F. Smith, and E. M. Christiansen (1985), The Business of Risk: Commercial Gambling in Mainstream America, University Press of Kansas Lawrence, KS

    Google Scholar 

  • Blaszczynski, A., V. Dumlao, and M. Lange (1997), “‘How Much Do You Spend Gambling?’ Ambiguities in Survey Questionnaire Items”, Journal of Gambling Studies, 13(3), pp. 237–252.

    Article  Google Scholar 

  • Blaszczynski, A., R. Ladouceur, A. Goulet, and C. Savard (2006) “‘How Much Do You Spend Gambling?’: Ambiguities in Questionnaire Items Assessing Expenditure”, International Gambling Studies, 6(2), pp. 123–128.

    Article  Google Scholar 

  • Clotfelter, C.T., and P.J. Cook (1987) “Implicit Taxation in Lottery Finance”, National Tax Journal, 40(4), pp. 533–546.

    Google Scholar 

  • Gerstein, D. R., R.A. Volberg, M.T. Toce, H. Harwood, R.A. Johnson, and T. Buie (1999), Gambling Impact and Behavior Study: Report to the National Gambling Impact Study Commission, Chicago: National Opinion Research Center

    Google Scholar 

  • Hansen, A., A. D. Miyazaki, and D. E. Sprott (2000), “The Tax Incidence of Lotteries: Evidence from Five States”, Journal of Consumer Affairs, 34(2), pp. 182–203.

    Article  Google Scholar 

  • Macdonald, M., J. L. Mcmullan, and D.C. Perrier (2004), “Gambling Households in Canada”, Journal of Gambling Studies, 20(3), pp. 187–236.

    Article  Google Scholar 

  • Mason, P. M., S. L. Shapiro, and M. O. Borg (1989), “Gaming Tax Incidence for Three Groups of Las Vegas Gamblers”, Applied Economics, 21(9), pp. 1267–1277.

    Article  Google Scholar 

  • Mobilia, P. (1992), “A Little Bit more Evidence of Lottery Regressivity: The Kansas State Lottery”, Journal of Gambling Studies, 8(4), pp. 361–369.

    Article  Google Scholar 

  • Mottu, E. (1997), «Progressivité de l’impôt fédéral direct et de la TVA en Suisse», Swiss Journal of Economics and Statistics (SJES), 133(IV), pp. 709–740.

    Google Scholar 

  • Musgrave, R.A., and P. B. Musgrave (1989), Public Finance in Theory and Practice, New York: McGraw-Hill.

    Google Scholar 

  • Petry, N. (2005), Pathological Gambling: Etiology, Comorbidity, and Treatment, Washington, DC: American Psychological Association.

    Book  Google Scholar 

  • Pirog-Good, M., and J. L. Mikesell (1995), “Longitudinal Evidence of the Changing Socio Economic Profile of a State Lottery Market”, Policy Studies Journal, 23(3), pp. 451–465.

    Article  Google Scholar 

  • Price, D. I., and E. S. Novak (1999), “The Tax Incidence of Three Texas Lottery Games: Regressivity, Race, and Education”, National Tax Journal, 52(4), pp. 741–752.

    Google Scholar 

  • Productivity Commission (1999), Australia’s Gambling Industries (Vol. Report No. 10), Canberra: Productivity Commission.

  • Rivenbark, W.C. (1998), “The Tax Incidence of Casino Gaming in Mississippi”, Public Finance Review, 26(6), pp. 583–598.

    Article  Google Scholar 

  • Rönnberg, S., R.A. Volberg, M.W. Abbott, W. L. Moore, A. Andrén, I. Munck and O. Svensson (1999), Gambling and Problem Gambling in Sweden, Report No. 2: International Gambling Research Team of Sweden.

    Google Scholar 

  • Suits, D. B. (1977a), “Gambling Taxes: Regressivity and Revenue Potential”, National Tax Journal, 30, pp. 19–35.

    Google Scholar 

  • Suits, D. B. (1977b) “Measurement of Tax Progressivity”, The American Economic Review, 67(4), pp. 747–752.

    Google Scholar 

  • Volberg, R. A. (1994), “The Prevalence and Demographics of Pathological Gamblers: Implications for Public Health”, American Journal of Public Health, 84(2), pp. 237–241.

    Article  Google Scholar 

  • Volberg, R.A., and M W. Abbott (1997), “Gambling and Problem Gambling among Indigenous Peoples”, Substance Use & Misuse, 32(11), pp. 1525–1538.

    Article  Google Scholar 

  • Volberg, R. A., and H.J. Steadman (1989), “Prevalence Estimates of Pathological Gambling in New Jersey and Maryland”, The American Journal of Psychiatry, 166, pp. 1618–1619.

    Google Scholar 

  • Welte, J.W., G. M. Barnes, W.F. Wieczorek, M.C. Tidwell, and J. Parker (2002), “Gambling Participation in the US - Results from a National Survey”, Journal of Gambling Studies, 18(4), pp. 313–337.

    Article  Google Scholar 

  • Wisman, J. D. (2006), “State Lotteries: Using State Power to Fleece the Poor”, Journal of Economic Issues, 40(4), pp. 955–966.

    Article  Google Scholar 

  • Worthington, A.C. (2001), “Implicit Finance in Gambling Expenditures: Australian Evidence on Socioeconomic and Demographic Tax Incidence”, Public Finance Review, 29(4), pp. 326–342.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Dimitri Kohler PhD.

Rights and permissions

Open Access  This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made.

The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

To view a copy of this licence, visit https://creativecommons.org/licenses/by/4.0/.

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Kohler, D. On the Regressivity of Gambling Taxes in Switzerland. Swiss J Economics Statistics 152, 193–208 (2016). https://doi.org/10.1007/BF03399426

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF03399426

JEL-Classification

  • H22
  • D63
  • I14
  • I18

Keyword

  • Gambling taxes
  • inequity
  • regressivity
  • incidence