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

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Listed:
  • Matias Giaccobasso
  • Brad C. Nathan
  • Ricardo Perez-Truglia
  • Alejandro Zentner

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.

Suggested Citation

  • Matias Giaccobasso & Brad C. Nathan & Ricardo Perez-Truglia & Alejandro Zentner, 2022. "Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending," NBER Working Papers 29789, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29789
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    Cited by:

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    2. Hoy,Christopher Alexander, 2022. "How Does the Progressivity of Taxes and Government Transfers Impact People’s Willingnessto Pay Tax ? Experimental Evidence across Developing Countries," Policy Research Working Paper Series 10167, The World Bank.
    3. Anne Brockmeyer & Francisco Garfias & Juan Carlos Suárez Serrato, 2024. "The Fiscal Contract up Close: Experimental Evidence from Mexico City," CESifo Working Paper Series 11270, CESifo.
    4. Patricia Gil & Justin Holz & John List & Andrew Simon & Alejandro Zentner, 2023. "Toward an Understanding of Tax Amnesties: Theory and Evidence from a Natural Field Experiment," Natural Field Experiments 00772, The Field Experiments Website.

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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