Featured Research

from universities, journals, and other organizations

A more progressive tax system makes people happier, 54-nation study finds

Date:
September 11, 2011
Source:
Association for Psychological Science
Summary:
The way some people talk, you'd think that a flat tax system -- in which everyone pays at the same rate regardless of income -- would make citizens feel better than more progressive taxation, where wealthier people are taxed at higher rates. Indeed, the United States has been diminishing progressivity of its tax structure for decades. But a new study comparing 54 nations found that flattening the tax risks flattening social wellbeing as well.

The way some people talk, you'd think that a flat tax system -- in which everyone pays at the same rate regardless of income -- would make citizens feel better than more progressive taxation, where wealthier people are taxed at higher rates. Indeed, the U.S. has been diminishing progressivity of its tax structure for decades.

But a new study comparing 54 nations found that flattening the tax risks flattening social wellbeing as well. "The more progressive the tax policy is, the happier the citizens are," says University of Virginia psychologist Shigehiro Oishi, summarizing the findings, which will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science. Oishi conducted the study with Ulrich Schimmack of the University of Toronto at Mississauga and Ed Diener, also at University of Illinois and the Gallup Organization.

The researchers analyzed the relationship between tax progressivity and personal well-being in 54 nations surveyed by the Gallup Organization in 2007 -- a total of 59,634 respondents. 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.

The degree of progressivity was measured by the difference between the highest and lowest tax rates, corrected for such confounding factors as family size, social security taxes paid, and tax benefits received by individuals.

The results: 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. That happiness, Oishi says, was "explained by a greater degree of satisfaction with the public goods, such as housing, education, and public transportation."

Higher government spending per se did not yield greater happiness, in spite of the well-being that was associated with satisfaction with state-funded services. In fact, there was a slight negative correlation between government spending and average happiness.

"That data is kind of weird," Oishi says. He guesses that the misalignment might indicate national differences in the efficiency with which those services are delivered or in people's relative ability to access them. For example, the U.S. spends more on education and health care than other developed countries, "but its international standing in those areas is not so great." Such puzzling findings may be illuminated in further research.

The study, like others Oishi has done looking at connections between economics and personal life, has important social implications. "If the goal of societies is to make citizens happy, tax policy matters," he says. "Certain policies, like tax progressivity, seem to be more conducive to the happiness of the people."


Story Source:

The above story is based on materials provided by Association for Psychological Science. Note: Materials may be edited for content and length.


Cite This Page:

Association for Psychological Science. "A more progressive tax system makes people happier, 54-nation study finds." ScienceDaily. ScienceDaily, 11 September 2011. <www.sciencedaily.com/releases/2011/09/110906152459.htm>.
Association for Psychological Science. (2011, September 11). A more progressive tax system makes people happier, 54-nation study finds. ScienceDaily. Retrieved August 21, 2014 from www.sciencedaily.com/releases/2011/09/110906152459.htm
Association for Psychological Science. "A more progressive tax system makes people happier, 54-nation study finds." ScienceDaily. www.sciencedaily.com/releases/2011/09/110906152459.htm (accessed August 21, 2014).

Share This




More Science & Society News

Thursday, August 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Bank of America's $17 Bln Settlement

Bank of America's $17 Bln Settlement

Reuters - Business Video Online (Aug. 21, 2014) Bank of America's settlement is by far the largest amount paid by big banks facing mortgage securities probes. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com
Cadavers, a Teen, and a Medical School Dream

Cadavers, a Teen, and a Medical School Dream

AP (Aug. 21, 2014) Contains graphic content. He's only 17. But Johntrell Bowles has wanted to be a doctor from a young age, despite the odds against him. He was recently the youngest participant in a cadaver program at the Indiana University NW medical school. (Aug. 21) Video provided by AP
Powered by NewsLook.com
Families Can Now Ask Twitter To Remove Photos Of Deceased

Families Can Now Ask Twitter To Remove Photos Of Deceased

Newsy (Aug. 20, 2014) In the wake of a high-profile harassment case, Twitter says family members can ask for photos of dying or dead relatives to be taken down. Video provided by Newsy
Powered by NewsLook.com
Reasons Why Teen Birth Rates Are At An All-Time Low

Reasons Why Teen Birth Rates Are At An All-Time Low

Newsy (Aug. 20, 2014) A CDC report says birth rates among teenagers have been declining for decades, reaching a new low in 2013. We look at several popular explanations. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins