*What are the societal consequences of economic inequality, and how do concerns for these consequences affect individuals' redistributive preferences? This paper examines beliefs about how economic inequality changes society and establishes a causal link between such inequality externality beliefs and redistributive preferences. Using two representative surveys of a combined 6,731 U.S. citizens, we show that a majority of respondents believe that inequality leads to negative societal outcomes through channels such as increased crime, deteriorating democratic institutions, and diminished economic growth. Such beliefs are similar among Democrats and Republicans, unlike broad economic fairness views which are more polarized. We establish a causal link from individuals' inequality externality beliefs to their redistributive preferences by using exogenously provided video information treatments. With this and other methods we estimate that inequality externality beliefs are about two-thirds as impactful for individuals' redistributive preferences as broad fairness views. Inequality externality-based arguments cause less anger among respondents than fairness-based arguments, however. Our results thus indicate a potential trade-off in debates on redistributive ideas; whereas fairness-based arguments are somewhat more persuasive, externality-based arguments seem to be less polarizing and present an opportunity for consensus-building.

**Based on French firm-level data over 15 years we evaluate the contribution of the microlevel profit-shifting –through tax haven foreign direct investments– to the aggregate productivity slowdown measured in France. We show that firm measured productivity in France declines over the immediate years following the establishment in a tax haven, with an average estimated drop by 3.5% in labor apparent productivity. To isolate the contribution of contribution of multinationals enterprises' (MNEs) tax optimization to this decline of apparent productivity, we then exploit the 2006 Cadbury-Schweppes decision of the European Court of Justice limiting the extent to which member States can counter European MNEs' tax planning strategies. We find that multinational groups benefiting from that loosening of the legal constraints do exhibit lower apparent productivity in France following that ruling. Our results moreover suggest that this bias is bigger when firms rely more intensively on intangible capital. Finally, given these firms’ weight in the economy, our results imply an annual loss of 9.7% in terms of the aggregate annual labor productivity growth.