Hundsdoerfer, Jochen Sielaff, Christian Blaufus, Kay Kiesewetter, Dirk Weimann, Joachim
arqus Discussion Paper No. 121
Arbeitskreis Quantitative Steuerlehre (arqus), Berlin
We apply conjoint analysis to study the influence of tax labeling and tax earmarking on German taxpayers' willingness to contribute. From a survey based sample we show that labeling and earmarking effects can substantially increase participants' willingness to contribute, which results in a considerable deviation from a pure consumption maximizing behavior. Furthermore, we give an explanation for this effect regarding socio-demographic attributes of German taxpayers. These results explain the variety in tax labels and provide implications for tax policy regarding further reforms of the tax and contribution system: Labeling and earmarking of contributions are important instruments in selling policies and increasing tax revenue.