Tax affinity hypothesis: Do we really hate paying taxes?
AbstractThis paper proposes and evaluates the tax affinity hypothesis claiming that individuals derive non-negligible utility from paying taxes due to their pro-social tendencies. We present a model in the neoclassical labor–leisure framework with tax paid as a third argument of the utility function. The Slutsky-like equations derived from this model suggest two testable hypotheses that differentiate it from the standard model. A controlled experiment provides support for the two testable propositions of the hypothesis: (1) subjects worked more in the presence of tax than in its absence at the same net wage rate, and (2) the impact of wage changes on labor supply depended not only on the after-tax wage rate, but also on the tax rate. The tax affinity hypothesis has important implications for tax policy and economic analysis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Psychology.
Volume (Year): 33 (2012)
Issue (Month): 4 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/joep
Taxation; Experimental economics; Altruism; Pro-social behavior;
Find related papers by JEL classification:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.