A More Progressive Tax System Makes People Happier

[jackdale]

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.”

A More Progressive Tax System Makes People Happier - Association for Psychological Science

[MikeinLA]

I would imagine that the 47% or so of Americans who pay NO income tax at all while enjoying all the benefits are extremely happy with our progressive system. I think it depends on who you ask.

Mike

[PBzeer]

Let me see if I have this right ... take a totally subjective survey, to arrive at objective results.

When the rest of the paper comes out, with a clearer view of the methodology, a list of the 54 countries and the actual results, per country, it can be properly evaluated. On the surface, it looks more like an answer in search of a question.

[imagine2frolic]

Just stopping the waste would put a smile on my face.........i2f

[jackdale]

Originally Posted by PBzeer

Let me see if I have this right ... take a totally subjective survey, to arrive at objective results.

When the rest of the paper comes out, with a clearer view of the methodology, a list of the 54 countries and the actual results, per country, it can be properly evaluated. On the surface, it looks more like an answer in search of a question.

For a copy of the article "Progressive Taxation and the Subjective Well-Being of Nations" and access to other Psychological Science research findings, please contact Lucy Hyde at 202-293-9300 or lhyde@psychologicalscience.org.

Have at it.

[PBzeer]

Thing is Jack, while they "may" have "proved" that people are happier in a country with a progressive tax system, it's a bit of a stretch to say the tax system is what makes them happier. Which is, "A More Progressive Tax System Makes People Happier", what you are claiming.

[jackdale]

Originally Posted by PBzeer

Thing is Jack, while they "may" have "proved" that people are happier in a country with a progressive tax system, it's a bit of a stretch to say the tax system is what makes them happier. Which is, "A More Progressive Tax System Makes People Happier", what you are claiming.

It is a correlation. Some other factors may be influencing both.

I probably should not have used the title from the news release from APS.

Maybe happy people make for a progressive tax system.

[jackdale]

Originally Posted by MikeinLA

I would imagine that the 47% or so of Americans who pay NO income tax at all while enjoying all the benefits are extremely happy with our progressive system. I think it depends on who you ask.

Mike

All the attention being showered on “47 percent” is ultimately a distraction from that reality.

The 47 percent number is not wrong. The stimulus programs of the last two years — the first one signed by President George W. Bush, the second and larger one by President Obama — have increased the number of households that receive enough of a tax credit to wipe out their federal income tax liability.

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

The reason is that poor families generally pay more in payroll taxes than they receive through benefits like the Earned Income Tax Credit. It’s not just poor families for whom the payroll tax is a big deal, either. About three-quarters of all American households pay more in payroll taxes, which go toward Medicare and Social Security, than in income taxes.

Yes, 47% of Households Owe No Taxes. Look Closer. - NYTimes.com

[PBzeer]

It is a correlation. Some other factors may be influencing both.

Ya think? I doubt that if you asked every respondent to the poll, what made them happy, that any of them would say having a progressive tax system. I'd go so far as to say it wouldn't even occur to them.

[Tempest]

Without commenting on the politics..

All both these articles seem to prove is that people can make numbers do what they want...

If 47 % of taxpayers.. or whatever the number is pay no federal INCOME tax...then they pay no federal income tax.

If they pay payroll tax,State income tax, sales tax, Medicaid and SS tax..The NY Times...would like to change the discussion to say..well they pay other taxes...and it's really only 10% that pay no taxes at all. They do this to make the point that the Rich should be taxed more. They could save some print and just say that..

Seems similar to the 1st article.... draw a conclusion...then figure out how to make the numbers fit your conclusion. Or am I missing something?