Framing Justice: Taxpayer Evaluations of Personal Tax Burdens

Abstract

This study examines how taxpayers evaluate the distributive justice of personal income tax burdens. Using the concept of framing from behavioral decision theory, we suggest that taxpayers employ either an outcome-processing or a norm-processing frame of tax fairness evaluation. Framing is affected by substantive tax policies and the tax situations of individuals. Taxpayers who qualify for tax deductions and other tax preferences employ an outcome-processing frame and focus on perceived abuses of government power when evaluating fairness. Those unable to claim tax breaks employ a norm-processing frame and focus on vertical social comparisons and their inability to qualify for valued tax breaks. The findings suggest that tax avoidance policies have the net effect of increasing public perceptions of unfairness in the tax system.