Happy Taxpayers? Income Taxation and Well-Being

Alpaslan Akay, Olivier Bargain, Mathias Dolls, Dirk Neumann (), Andreas Peichl and Sebastian Siegloch

No 526, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: This paper offers a first empirical investigation of how labor taxation (income and payroll taxes) affects individuals' well-being. For identification, we exploit exogenous variation in tax rules over time and across demographic groups using 26 years of German panel data. We find that the tax effect on subjective well-being is significant and positive when controlling for income net of taxes. This interesting result is robust to numerous specification checks. It is consistent with several possible channels through which taxes affect welfare including public goods, insurance, redistributive taste and tax morale.

Keywords: subjective well-being; taxation; public goods (search for similar items in EconPapers)
JEL-codes: H21 H41 I38 (search for similar items in EconPapers)
Pages: 31 p.
Date: 2012
New Economics Papers: this item is included in nep-hap, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.414074.de/diw_sp0526.pdf (application/pdf)

Related works:
Working Paper: Happy Taxpayers? Income Taxation and Well-Being (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp526

Access Statistics for this paper

More papers in SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP) Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().