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The name game for contributions: Influence of labeling and earmarking on the perceived tax burden

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  • Hundsdoerfer, Jochen
  • Sielaff, Christian
  • Blaufus, Kay
  • Kiesewetter, Dirk
  • Weimann, Joachim

Abstract

In this paper we apply conjoint analysis as an empirical method to study the influence of tax labeling and tax earmarking on the perceived tax burden. As reference for the individual behavior we use the model of a rational utility maximizer described by the economic theory. We determine a significant influence of the labeling and the earmarking of taxes. We can show that the labeling and earmarking effect can decrease the perceived tax burden for the test persons which results in a deviation from a (rational) consumption maximizing behavior. These results give important implications for tax policy regarding further reforms of the tax and contribution system.

Suggested Citation

  • Hundsdoerfer, Jochen & Sielaff, Christian & Blaufus, Kay & Kiesewetter, Dirk & Weimann, Joachim, 2010. "The name game for contributions: Influence of labeling and earmarking on the perceived tax burden," Discussion Papers 2010/12, Free University Berlin, School of Business & Economics.
    • Handle: RePEc:zbw:fubsbe:201012
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    References listed on IDEAS

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    1. Alm, James & McClelland, Gary H. & Schulze, William D., 1992. "Why do people pay taxes?," Journal of Public Economics, Elsevier, vol. 48(1), pages 21-38, June.
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    6. McCleary, William, 1991. "The Earmarking of Government Revenue: A Review of Some World Bank Experience," The World Bank Research Observer, World Bank, vol. 6(1), pages 81-104, January.
    7. Cowell, F. A., 1992. "Tax evasion and inequity," Journal of Economic Psychology, Elsevier, vol. 13(4), pages 521-543, December.
    8. Kay Blaufus & Renate Ortlieb, 2009. "Is Simple Better? A Conjoint Analysis of the Effects of Tax Complexity on Employee Preferences Concerning Company Pension Plans," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 61(1), pages 60-83, January.
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    Cited by:

    1. Sielaff, Christian, 2011. "Steuerkomplexität und Arbeitsangebot: Eine experimentelle Analyse," Discussion Papers 2011/13, Free University Berlin, School of Business & Economics.

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    More about this item

    Keywords

    Tax Labeling; Tax Earmarking; Perceived Tax Burden; Behavioral Taxation; Non Rational Behavior; Conjoint Analysis; Education Allowance; Contribution System; Health Insurance;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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