“The only two certainties in life are death and taxes.” – Mark Twain

But how much taxes? Well that’s a hotly debated issue.

When it comes to taxes, what is fair? What is tolerable? Acceptable?

Thanks to THIS (below) report…

Maybe more than you realize.

[via The Blaze] Okay, let’s face it: we all hate paying taxes and the less we have to pay, the happier we are, right? Apparently not.

According to a new study titled “Tax affinity hypothesis: Do we really hate paying taxes?” we may not hate paying taxes as much as we think we do. “People would prefer to keep a dollar than pay it in tax,” the study’s authors, Iwan Djanali and Damien Sheehan-Connor, write, “but paying it in tax is not equivalent to throwing the money away.” The report argues that while most (if not all) taxpayers would prefer to hold on to their own money, there is some benefit to paying taxes.[…]

“We believe that paying taxes also gives you some utility, even though you’re enjoying less consumption,” he added.

“You get some ‘soft utility’ out of it. We call this ‘the warm glow.’ You feel good about helping others, even though you don’t get a direct monetary reward out of it.”

Tom Jacobs of Miller-Mcune describes an experiment (called the “tax affinity hypothesis”) Djanali performed to prove his theory:

Sixty-six undergraduates were paid cash to perform a simple but tedious task: Shading in small circles. During six rounds of five minutes each, they were given a fixed sum for each circle they filled in.

For certain rounds, participants were paid at a higher rate — but they were also “taxed” on their earnings, and those taxes ate up all of the difference.[…]

So what did the study find?

Asked if they thought they worked harder during the “taxed” rounds, less than a third answered yes, which is odd considering the fact that “most of them did work harder in those rounds,” according to the study.

“This implies that people may respond to incentives even when they are not aware that they are doing so,” the study claims, “Among those who said yes, most claimed that the added incentive of knowing that some money would go to a good cause influenced them to work harder.”[…]

“One of the biggest issues in political debates around tax reform is whether higher taxes are a disincentive to work,” Djanali said. “The argument is when you tax people so high, they’re less willing to work.”

Well, that’s not strictly true. It’s not that people are going to stop working altogether. It’s that they will find ways around high taxes which oftentimes involve things like job outsourcing and clever tax dodges like the infamous “Dutch Sandwich.” (For another example on how they avoide taxes? See the quoted article below.)

“What we’re saying is, yes, it would reduce incentive to work,” Djanali continued, “But the reduction will not be as large as you might think, because people get some utility out of paying taxes. So this could have an impact on policy discussions.” [Read More - Very Interesting Article, Read the Whole Thing HERE!]

Taxes are incentives for people to work harder?

Well, duh.

Logically, you take into account, of course, the possibility that the people in the above study probably felt the incentives of taxes to ‘work harder’ during taxed portions of the study, only because they had to do double the work to make the same amount of money. And sure, when it comes to finite time-limitation on this study?

Sure people are willing to put forth the extra work needed to support a tax. They know they do not need to “work hard” forever, just during the limited duration of the study.

However when it comes to REAL life situations, and the infinitesimal idea of high taxes imposed on a person indefinitely?

You must take one other report into account.

The one that blatantly states that people are renouncing citizenship to AVOID the barrage of punishing, unrelenting taxes.

Duh again.

[via DailyMail] As millions of Americans are scrambling to get their tax returns postmarked by this evening, a smaller sect did something much more drastic and renounced their US citizenship.

Last year alone, almost 1,800 people renounced their U.S. citizenship or handed in their Green Cards – and many of them said it was because of tax reasons.

That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.[Read More]

And considering how FEW people are actually paying in taxes anyway?

Yes…

Increasing taxes on those limited few who can actually afford to flee the U.S. to countries with lower tax rates?

[via CNSNews] Americans Making Over $50,000 a Year Paid 93.3 Percent of All Taxes in 2010

Americans making over $50,000 paid most of the federal taxes that were paid in the U.S. in 2010.

According to statistics compiled from the Internal Revenue Service (IRS) by the Tax Foundation, those people making above $50,000 had an effective tax rate of 14.1 percent, and carried 93.3 percent of the total tax burden. [Read More]

*whispers*

“Probably not the best idea.”

And yet?

It seems to be the ONLY idea the present Administration has to combat our current economic burdens…

More taxes.

Brilliant!

*shakes head sadly*