Interesting Research: Brains May Like Taxes
Late to the party as always, I’d like to point out that University Economics Professor Bill Harbaugh has a new paper on paying taxes in Science a couple of weeks ago. First of all, congratulations to Professor Harbaugh on getting this interesting piece of research into a leading journal. Go Science! Secondly, I’d like to move on to my amateurish and maybe misplaced critique.
Unlike a lot of right-leaning folks, and especially unlike many libertarians, I’m open to the possibility that paying taxes does make people feel good in some way, some of the time. If you think of a nation-state as a really large tribe, and think a little about how important intra-tribal generosity can be in an evolutionary setting…well, maybe even compelled generosity can make people feel good. But, even if the conclusion is right, I don’t think it really has much implication for the proper relationship between man and the state: the proper role and function of government is unaffected by what makes people feel good. In fact, I would argue, that due to the extremely difficult problems we face when we try to aggregate preferences, and the strange behavior of voters, that we will never be able to achieve a satisfactory outcome for all or even most citizens in a given nation-state. Therefore, the philosophical position that a minimal state achieves the most freedom and allows individuals to pursue their own ends with minimal interference which allows the best outcomes given the constraints of the real-world, is still fairly compelling, I think. Furthermore, if voluntary giving and compelled giving stimulate the same area of the brain it seems that allowing people to keep their money and donate to charity as they see fit would achieve similar ends to forced giving through a state system. Additionally, perhaps paying taxes doesn’t offer the same kind of hedonistic reward as relevant alternatives, which would mean it isn’t the best choice in many instances. Science’s summary seems to say that much is true:
The sense of well-being in the voluntary giving condition surpassed that seen when subjects were taxed.
In any case, I have a few questions about the study in general:
1) As the ODE story points out, only 19 people were sampled for this study. That’s a pretty small sample to draw conclusions from, and it could be biased, so I wonder if this paper should really serve as a jumping-off point for larger sample studies in the future.
2) Is compelled donation to a local food bank really a good proxy for taxation? A local food bank is an easily identifiable good, and one that has fairly measurable effects that participants in the study can see or at least read about in the local paper. Taxation, on the other hand, helps and hinders a variety of activities by a variety of people at a fairly large remove from the taxpayer which could, I suppose, reduce the effect if people feel more tribe-like affinity for their city than they do for the country as a whole. So I’m not sure that a local food bank is exactly the right proxy for taxation as it is actually practiced. I wonder if a better proxy would be something like a rich compact of Hawaiians in Maui.
Maybe those two issues are addressed in the full paper, but I’m not made of money so I don’t have a subscription to Science and I can’t seem to find a working-paper version anyplace on Professor Harbaugh’s website. Anyway, it is a pretty interesting bit of research and I’d be interested to hear answers to the above.
UPDATE: A friend of mine has graciously provided me with a .pdf of the entire paper, which I will read tonight after work and may post about after I’ve had a chance to {attempt} to digest the whole thing.
June 25th, 2007 at 6:00 pm
I’d say it comes down to advertising. The government has shitty advertising regarding the perceived benefits of taxation for the tax-payer. Charities have much better advertising. I see it as a property rights incentive problem, whereas the plethora of bureaucrats have very little incentive individually to work at increasing tax revenues, let alone being decent human beings.
June 25th, 2007 at 8:15 pm
I’d say it comes down to … booooooooooooooooorrrrrrriiiiiiinnnnnnnnnngggggggg!!!!!!!!!!!!!
June 25th, 2007 at 10:19 pm
And people wonder why I’m rarely serious.
June 25th, 2007 at 10:59 pm
Jokes, jokes. Actually, I didn’t even see the Harbaugh story in the ODE, though it makes sense because I think a) the editors have a giant boner for him or b) he has a really good publicist. He’s in the ODE all the Goddamn time. Seriously. I think it was a good to point out the paltry sample number, too.
Also, I disagree with Andy. The government has completely radical advertising. Those commercials for the Marines are totally kewl — the ones in which the faceless soldier is having a sword fight with a dragon on top of Mt. Mordor. That shit rocks, Andy!!!
June 26th, 2007 at 5:26 am
I think the message is something like: Join the Marines, lose yourself, fight bad CG!
June 26th, 2007 at 8:18 am
The Chess one is pretty cool, too.
I was thinking about taking 300, the final scene where Leonidas throws the spear, and then right afterwards, show him transforming into a Marine with Dress Blues as a Marine Corp ad. Or maybe just the whole 300 movie, and then at the end, put “Paid for by the United States Marine Corps.”
June 26th, 2007 at 9:27 am
My personal favorite advertisements for “your tax dollars at work” right here…
June 26th, 2007 at 1:35 pm
Have you seen The Brick Testament? It’s the Bible in lego form. Totally brilliant. For example, the Bible’s stance on Bestiality.
June 27th, 2007 at 12:09 am
The lego bible is great. Check out the first slide of Cain and Abel!
June 27th, 2007 at 7:28 am
Me? I’m always amused by Lego Concentration Camp. Those little skeletons are just smiling and happy to be there!
June 27th, 2007 at 4:08 pm
Maybe the most idiotic and non-scientific aspect of this experiment was the fact that the money was given - not earned. Naturally, a person being given $100 is going to be a bit more liberal with it than someone who dealt with clean-ups on aisles 5, 6 and 19 for a day and a half. It seems a given that a study claiming to measure pleasure in spending would account for this.
June 27th, 2007 at 5:55 pm
Colin: “Maybe the most idiotic and non-scientific aspect of this experiment was the fact that the money was given - not earned.”
Steady on, Colin, jeez. In order for an experiment to be “scientific”, it has to be replicable: that is, independent researchers should be able to do the same thing you did and get comparable results. For this to happen, external factors have to be controlled as much as possible. So, sending people out to earn their seed money before conducting the experiment would be pretty much the least scientific thing you could possibly do in this situation, although I’m sure it would result in some nice anecdotes.
Tim: “As the ODE story points out, only 19 people were sampled for this study. That’s a pretty small sample to draw conclusions from…”
It’s not statistically significant, but are they claiming it is? (Any chance you could email me that PDF?)
June 27th, 2007 at 8:48 pm
I’d be happy to email a pdf of the paper to anyone who asks - my address is posted on my website, http://harbaugh.org
Yours, Bill Harbaugh.
June 27th, 2007 at 10:11 pm
Harbaugh reads the OC blog?? Pretty impressive….
June 28th, 2007 at 3:08 pm
Thanks for the offer Professor Harbaugh.
Olly: If you haven’t already emailed Prof. Harbaugh about it I can send it along, just let me know. And IIRC, you can draw significant conclusions from small samples, but you can’t always assume its mean is the true mean. Anyway, that’s why I wonder about the small sample size. After I have a chance to read the paper I may be of a completely different opinion.
Colin: You can call Bill Harbaugh a lot of things, but I think “idiot” is pretty far off the mark. I mean, as I stated in my post I have not read the paper yet and this post is based on the Science synopsis, so I could be pretty off-base and I am certainly not an expert on neuroeconomics. Mostly I thought it was an interesting idea, that it’s cool a professor in the UO department is in Science, and that it might be worth reading the whole thing to see what they actually claim.
June 28th, 2007 at 5:34 pm
“So, sending people out to earn their seed money before conducting the experiment would be pretty much the least scientific thing you could possibly do in this situation, although I’m sure it would result in some nice anecdotes.”
Fair point. But I don’t think that contradicts my point - which I would like to clarify: the conclusions derrived from the experiment are faulty. Taxes, by definition, come from an earned income. The experiment can apply to money given but it cannot apply to taxes (some exceptions like inheritance taxes could be loosely tied to the research but even that is highly dubious).
Tim: No one is calling anyone an idiot. I am calling a particular aspect of the experiment and the conclusions being drawn “idiotic” - which they are. However, I am excited to read the full paper and possibly have my views amended.
PS: nice to talk with you all again. I hope you are both doing well.
June 28th, 2007 at 7:44 pm
You too Colin, nice to see what ex-OCers are up to, the full paper is pretty interesting so far, but I’m not very far into it, work sucked up all of today. Pesky job, making me earn the money they pay me.
EDIT: I think I was also probably premature with the whole idiot thing, although I think Olly’s point is right on.
June 28th, 2007 at 8:55 pm
[…] read the full paper that I mentioned here, I think some of my initial reservations, which were based on a synopsis, were a little misplaced. […]
June 28th, 2007 at 9:15 pm
[…] read the full paper that I mentioned here, I think some of my initial reservations, which were based on a synopsis, were a little misplaced. […]