The effect of individual vs. collective choice on tax compliance
Creators: name: Filippi, Silvia
Publisher: name: OSF Registries
Year: 2024
Subjects: subject: Social and Behavioral Sciences

description: Research provides evidence that choice positively affects an individual's health and happiness. A meta-analysis by Patall and colleagues (2008) highlights the impact of choice on effort, task performance, perceived competence and intrinsic motivation. Since the positive effects of choice are well-known, recent studies suggest that giving people the possibility to choose to which public services to allocate tax revenues, may be beneficial in terms of their tax compliance. Indeed, Literature suggests that taxpayer compliance can be increased involving citizens in the process of tax choice, a task that is generally reserved to parliaments. Lamberton and colleagues (2018) highlighted that allowing taxpayers to express non-binding preferences about the way their tax money is spent leads to an increase in their tax compliance. Investigating the role of tax choice in shaping people’s tax compliance is crucial, as tax evasion is a massive problem worldwide. Although the literature in psychology has begun to address the topic of tax choice, no study has yet investigated the difference between individual and collective choice in stimulating increased tax compliance. Moreover, no research concerning tax choice and compliance has been conducted in the Italian context yet. The present study aims to overcome these limits by focusing on two different tax choices, namely individual vs. collective choice. Indeed, in Italy, taxpayers experience individual choice mainly when deciding about two fractions of their income taxes, namely church tax and Cinque per Mille, that allows taxpayers to dedicate a small proportion of their tax money to organizations pursuing socially useful aims, typically non-profit organizations, universities or research institutions. Another way to decide about tax revenues is being involved in participatory budgeting process, in which citizens are collectively involved in the process of deciding how public money is spent.
To experimentally test the effect of individual (vs. collective) choice we will develop an online survey in which participants will be asked to imagine that they are going to start a new life in a fictitious society. To improve the procedure’s realism and make the manipulation more effective we will invite participants to make essential choices for their new life, such as buying a house, a means of transportation, and a possible holiday. After this task, participants will be randomized in 1 of 3 conditions. In the first condition we will manipulate individual choice by asking participants to choose in which public service (e.g.,education research and culture, transport and infrastructure, work and family, security and defense, health and welfare and environment and energy) to allocate 15% of their tax money. In the second condition we will manipulate collective choice by simulating a participatory budgeting in which all the population has to decide in which public service to allocate 15% of citizens’ tax money. The third condition (control condition) will not include any tax choice tasks. Afterwards, we will measure participants’ a) trust in government spending; b) perceived procedural justice (how taxes are managed); c) tax compliance (enforced vs. voluntary); d) perceived sense of community; e) intolerance for uncertainty.
Participants' demographic characteristics such as gender, age, educational level, working status, income and perceived socio-economic class will be assessed.