We are delighted to invite you to the Economics research seminar by Kaetana Numa, Research Fellow at the Centre for the Study of Governance and Society at the Department of Political Economy, King's College, London. The seminar will take place on June 3rd at 4PM on MS Teams (please find the link below).
More about the speaker: https://orcid.org/0000-0003-1475-6231
Title: Finding Fiscal Illusion: A Survey Experiment with Personalized Fiscal Information
Abstract: The theory of fiscal illusion was formulated by the classical Italian political economist Puviani, and was primarily concerned with individual level fiscal illusion – widely held misperceptions, or false beliefs – on taxpayers' actual costs and benefits of the public sector. Modern fiscal illusion literature mostly consists of econometric studies using aggregate data, with weak and conflicting evidence on fiscal illusion, and is frequently criticized on methodological grounds. This paper proposes to return to the individual level analysis used in Puviani's theory. It is the first study to provide taxpayers with comprehensive personalized fiscal information by constructing a personalized fiscal calculator and embedding it within a survey experiment in 2018, with a final sample of 4,480 UK employees randomized into a Control (uninformed) and a Treatment (informed) group. Treatment group members were provided with their personalized tax statements (covering eight main taxes paid by UK employees), and personalized statements on costs of the public services (encompassing 16 public spending areas). The experiment demonstrated that the provision of personalized fiscal information led to less support for higher taxes, and more support for lower taxes in case of Total tax, and six out of eight taxes studied, with more respondents viewing their tax as unfair. On the spending side, the provision of personalized fiscal information led to less support for higher spending on public services, and more support for lower spending for Total spending, and 12 out of 16 public services included in the study; while in two cases, it reduced support for lower spending.