Cognitive load and tax compliance
Creators: name: Filippi, Silvia
Publisher: name: OSF Registries
Year: 2023
Subjects: subject: Social and Behavioral Sciences

description: The gap between the rich and the poor is increasing and negatively impacting a raft of social and health outcomes (Wilkinson &amp; Pickett, 2019). Nevertheless, people’s desire for greater equity (Norton &amp; Ariely, 2011; Galdi, 2016) rarely translates into support for concrete redistribution strategies such as support for progressive taxation, recognized as an effective tool for reducing economic inequalities (Kaplow &amp; Shavell, 2002; Pressman, 2014; Piketty, 2015; Stiglitz, 2017). Therefore, investigating the barriers to tax compliance is crucial. Literature suggests that taxpayer compliance can be increased by involving citizens in the process of tax choice (Lamberton et al., 2018). Tax choice is a strategy that allows citizens to get involved in the process of allocating tax revenues to specific public goods, a task that is generally reserved to parliaments. Different from other types of frames, this strategy focuses on the process rather than the outcome (Alm, 2018) and hence may shift people’s perception of procedural justice surrounding taxation. Although research on tax choice suggests that such choice frames substantially increase the amount of taxes that people consider fair and that they are willing to contribute (Abbiati et al., 2014; Alm, 2018), as well as their tax compliance (Casal et al., 2016), little attention is given to the role of choice overload in affecting this relationship (see Chernev et al, 2015 for a review). Drawing on Schwatz (2004) this study aims to test wheter the number of choices presented to citizens may affect people’s tax compliance. Despite multiple benefits, a large number of options may increase the cognitive cost associated with the choice, and therefore, choice complexity (see, for example, Iyengar &amp; Lepper, 2000). We also aim to investigate the effect of time stress in exacerbating this relationship. Indeed, it has been demonstrated that imposing a time limit on option evaluation increases the cognitive load associated with the decision, causing responders to conduct a less systematic evaluation of the available options (Bettman, Luce and Payne, 1998). To test the effect of preference expression, we will manipulate participants’ perception of tax choice through an experimental paradigm, structured for this specific study. Specifically, participants will be randomly assigned to one of two conditions (control vs. choice). In the first condition (control condition) participants will be presented with a brief description of tax money allocation from the Government. In the second condition (choice condition) participants will be randomized into 1 of 21 sub-conditions, where we will manipulate the number of options available (from 2 to 20) and the temporal stress (stress vs. no stress). Subsequently, we will provide participants with a scale of tax compliance (voluntary vs. enforced, following Kirchler &amp; Wahl, 2010), perceived difficulty for the choice made, perceived satisfaction and regret with the choice made, tax attitude and demographics (gender, age, educational level, working status, political orientation and socio-economic status).