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

Matias Giaccobasso (), Brad Nathan (), Ricardo Perez-Truglia and Alejandro Zentner ()
Additional contact information
Matias Giaccobasso: VATT Institute for Economic Research
Brad Nathan: Rutgers University
Alejandro Zentner: University of Texas at Dallas

No 28, Working Papers from Finnish Centre of Excellence in Tax Systems Research

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.

Keywords: taxes; protest; public services; education; redistribution (search for similar items in EconPapers)
JEL-codes: C93 H26 I22 K34 K42 Z13 (search for similar items in EconPapers)
Pages: 179
Date: 2024-02
New Economics Papers: this item is included in nep-dcm, nep-exp, nep-iue and nep-pbe
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Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research

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Working Paper: Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending (2022)
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