Monday, October 10, 2011

Progressive taxes can make you happy - new research

Does paying tax make people unhappy? Well it depends on the circumstances. If people pay tax and get no useful services in return they have good reason to be unhappy. On the other hand where people perceive that the tax system is progressive and provides them with a satisfactory range of public goods, they are more likely to be happy. That's the finding of new research by the Association for Psychological Science, which compared 54 nations and concluded that the more progressive a country's tax regime is, the more likely its citizens are to consider themselves happy.

Based on a sample frame of nigh on sixty thousand respondents to Gallup research on wellbeing, the research linked people's assessment of personal wellbeing to satisfaction with public goods:

"Well-being was expressed in people’s assessments of their overall life quality, from “worst” to “best possible life,” on a scale of 1 to 10; and in whether they enjoyed positive daily experiences (such as smiling, being treated with respect, and eating good food) or suffered negative ones, including sadness, worry, and shame. Finally, the analysis looked at the participants’ satisfaction with their nation’s public goods, from schools to clean air."

Tax progressivity was measured by comparing the gap between lower and upper tax rates, with correction for factors such as family size, tax benefits, and social security payments.

The results confirm TJN's view that tax systems which are seen to be just, combined with effective delivery of public services, are more likely to contribute to personal wellbeing and social harmony:

"On average, residents of the nations with the most progressive taxation evaluated their own lives as closer to “the best possible.” They also reported having more satisfying experiences and fewer discomfiting ones than respondents living in nations with less progressive taxes."

Clich here to obtain the full report on this fascinating new research.

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