The social psychology of taxation

This paper outlines the overlap between social psychology, taxation and government spending; an area referred to as ‘fiscal psychology’. Attention is drawn to the tendency of many public economists to ignore the intervening variables between economic stimuli and economic response. These intervening variables are largely attitudinal and could be used to improve economic predictions, understanding of the effects of taxes on work effort, the tendency to evade taxes and more generally, the relationship between taxpayer and government. Fiscal psychology also incorporates familiar approaches in social psychology including equity, intergroup relations, and attribution theory, and debates about attitude structure and the attitudes/behaviour link. Comment is additionally made on the importance of assessing taxpayers' preferences for government spending, and their influence on government fiscal policy as well as their reaction to it. This is done in the light, here as elsewhere, of the discussion as to the ‘descriptive’ or ‘prescriptive’ nature of social psychology in the real world.