Grandchildren and Views about Consumption Tax

In Japan, an increase in the consumption tax rate, a measure of balanced public finance, reduces the inequality of the fiscal burden between present and future generations. This study estimates the effect of grandchildren on an older person's view of consumption tax by using independently collected data. The results show that having grandchildren is positively associated with supporting an increase in the consumption tax. This implies that people of the older generation are likely to accept the tax burden to reduce the burden on their grandchildren. In other words, grandparents show intergenerational altruism.