The Impact of Voting on Tax Payments

Ingrid Wahl, Stephan Muehlbacher and Erich Kirchler

Kyklos, 2010, vol. 63, issue 1, 144-158

Abstract: It is hypothesized that allowing taxpayers to participate in governmental decisions on the use of tax money would increase their cooperation and willingness to pay the tax due. In experiment 1 (N = 97), participants voted between different rules for a public good game and cooperated with their group by contributing to the group account. Cooperation in experiment 2 (N = 119) was defined as the participants' tax payments. The participants were allowed to vote on the use of their tax money. Additionally to the voting manipulation, the participants learned that either they themselves or others would benefit from tax‐financed projects. The results from both experiments suggest that voting, i.e., participation, increases cooperation. Whether participants benefited themselves from tax‐financed projects or whether others benefited from the projects did matter for participants' tax compliance. Furthermore, the results indicate that more procedural fairness was perceived when allowing for voting and that participants' trust in the governmental system mediates the relation of procedural fairness and tax payments.

Date: 2010
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