The Power of Voice in Stimulating Morality: Eliciting Taxpayer Preferences Increases Tax Compliance

Abstract

Decisions about paying taxes represent one of the most common moral quandaries faced by citizens. In the present research, we argue that taxpayer compliance can be raised by increasing “voice”: allowing taxpayers to express non‐binding preferences about the way their taxes are used. We first test for effects of preference expression on tax compliance with a tax in a laboratory setting. Here, we find that allowing participants to express non‐binding preferences over tax spending priorities leads to a 16% increase in compliance. A follow‐up online study tests this treatment with a simulation of paying US federal taxes. Allowing taxpayers to express their preferences on the distribution of government spending reduces the stated take‐up rate of a questionable tax loophole by 15%. A third experiment shows that this effect only occurs when taxpayers have voice in spending on preferred tax categories, allocating tax dollars across disliked spending categories increased neither feelings of voice nor likelihood of payment.