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

Author

Listed:
  • Matias Giaccobasso
  • Brad 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 Nathan & Ricardo Perez-Truglia & Alejandro Zentner, 2025. "Where Do My Tax Dollars Go? Tax Morale Effects of Perceived Government Spending," American Economic Journal: Applied Economics, American Economic Association, vol. 17(4), pages 223-259, October.
    • Handle: RePEc:aea:aejapp:v:17:y:2025:i:4:p:223-59
    DOI: 10.1257/app.20240029
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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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