The Effect of Income Tax on the Motivation to Work Depends on People’S Cultural Philosophies

Scott Rick, University of Michigan, USA
Gabriele Paolacci, Erasmus University Rotterdam, The Netherlands
Katherine Burson, University of Michigan, USA
Does the presence of income taxes affect productivity? We conducted an incentive-compatible labor experiment that controlled for net wages. Taxes generally decreased persistence and accuracy (and thus earnings) in a counting task. However, among Egalitarian-Communitarians (who chronically loathe inequality and endorse government intervention), taxes actually increased productivity.
[ to cite ]:
Scott Rick, Gabriele Paolacci, and Katherine Burson (2013) ,"The Effect of Income Tax on the Motivation to Work Depends on People’S Cultural Philosophies", in NA - Advances in Consumer Research Volume 41, eds. Simona Botti and Aparna Labroo, Duluth, MN : Association for Consumer Research.