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How Does the Progressivity of Taxes and Government Transfers Impact People’s Willingnessto Pay Tax ? Experimental Evidence across Developing Countries

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  • Hoy,Christopher Alexander

Abstract

This paper examines how the progressivity of taxes and government transfers impactspeople’s willingness to pay tax through a randomized survey experiment with over 30,000 respondents across eightdeveloping countries. Respondents increased (decreased) their willingness to pay taxes when they received accurateinformation that taxes in their country are progressive (not progressive). These effects were predominantly driven byrespondents in cases where the information they received was counter to their prior beliefs and/or consistent with theirpreferences. These results suggest changes in policies that increase (decrease) the progressivity of tax systems mayalso lead to increases (decreases) in tax compliance.

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  • 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.
    • Handle: RePEc:wbk:wbrwps:10167
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