Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending

Matias Giaccobasso, Brad Nathan, Ricardo Perez-Truglia and Alejandro Zentner

American Economic Journal: Applied Economics, 2025, vol. 17, issue 4, 223-59

Abstract: Do perceptions about government spending affect willingness to pay taxes? We test this hypothesis with a natural field experiment that focuses on the allocation of property taxes to public schools. Our results show that taxpayers often misperceive the destination of their tax dollars. By introducing shocks to households' perceptions via an information-provision experiment, we find that perceptions of how tax dollars are used significantly affect the probability of filing a tax appeal. Moreover, the effects are consistent with reciprocal motivations: individuals are more willing to pay taxes if they believe that the government services funded by those taxes will provide greater personal benefit.

JEL-codes: C93 D12 H26 H71 H72 H75 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/app.20240029

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