Ebook: Framing Effects in Taxation: An Empirical Study Using the German Income Tax Schedule

On October 24th, 1994, the pro-government German newspaper 'Die Welt' reported that the Minister of Family Affairs, Mrs. Hannelore Ransch, member of the ruling Christian Democratic Union (CD U), withdrew her candidacy for a second term after serving a four year term. While Chancellor Helmut Kohl and other party colleagues officially expressed their regret for this move, the conservative press openly announced their relief. A symbolic photo of Ransch was published together with the article: In the background, two direction indicators are discernable, one pointing to the 'emergency exit' and the other to the 'escape route'. What led up to this state of affairs? Some months before, Ransch had triggered off a storm of public indignation due to her proposal to partly re­ place the present German child-benefit system by 'tax fines for the childless'. To be exact, the minister's idea was to distinctly increase child allowance and child benefit, and to bill childless families for this measure, that is, childless couples and singles should have to payoff a tax surcharge christened 'Zu­ kunftsbeitrag' (,contribution to the future'). However, only the second part of her proposal, the tax fine, made it to the headlines (compare, for exam­ ple, 'Frankfurter Allgemeine Zeitung', February 19th, 1994, and 'Die Welt', March 28th, 1994).

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The subject of this work is framing effects in the perception of taxation. Its purpose is to demonstrate that the framing of the tax system, i.e. describing the tax system either in terms of gains or losses, can significantly alter peoples preferences for taxation.
In order to investigate such framing effects empirically , a large survey among the personnel of several North-German firms was conducted.
The first part of the book gives a comprehensive survey of the literature concerned with framing effects a task that has not yet been done - and also provides new insights into the theory of framing. The second part reports on the results gained from our empirical investigation. It is shown that people indeed are susceptible to framing effects in the way hypothesized. The results strongly support Richard Thaler's endowment-effect hypothesis.

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The subject of this work is framing effects in the perception of taxation. Its purpose is to demonstrate that the framing of the tax system, i.e. describing the tax system either in terms of gains or losses, can significantly alter peoples preferences for taxation.
In order to investigate such framing effects empirically , a large survey among the personnel of several North-German firms was conducted.
The first part of the book gives a comprehensive survey of the literature concerned with framing effects a task that has not yet been done - and also provides new insights into the theory of framing. The second part reports on the results gained from our empirical investigation. It is shown that people indeed are susceptible to framing effects in the way hypothesized. The results strongly support Richard Thaler's endowment-effect hypothesis.
Content:
Front Matter....Pages i-ix
Introduction....Pages 1-4
Front Matter....Pages 5-5
The Organization of Experience....Pages 7-27
Prospect Theory: Reference—Dependent Decision—Making....Pages 29-52
The Endowment Effect....Pages 53-76
The Status Quo Bias....Pages 77-91
Upshot: (How) Should Economists React to Framing Effects?....Pages 93-96
Front Matter....Pages 97-97
The Survey....Pages 99-126
Results....Pages 127-159
Summary and Conclusion....Pages 161-166
Back Matter....Pages 167-208

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The subject of this work is framing effects in the perception of taxation. Its purpose is to demonstrate that the framing of the tax system, i.e. describing the tax system either in terms of gains or losses, can significantly alter peoples preferences for taxation.
In order to investigate such framing effects empirically , a large survey among the personnel of several North-German firms was conducted.
The first part of the book gives a comprehensive survey of the literature concerned with framing effects a task that has not yet been done - and also provides new insights into the theory of framing. The second part reports on the results gained from our empirical investigation. It is shown that people indeed are susceptible to framing effects in the way hypothesized. The results strongly support Richard Thaler's endowment-effect hypothesis.
Content:
Front Matter....Pages i-ix
Introduction....Pages 1-4
Front Matter....Pages 5-5
The Organization of Experience....Pages 7-27
Prospect Theory: Reference—Dependent Decision—Making....Pages 29-52
The Endowment Effect....Pages 53-76
The Status Quo Bias....Pages 77-91
Upshot: (How) Should Economists React to Framing Effects?....Pages 93-96
Front Matter....Pages 97-97
The Survey....Pages 99-126
Results....Pages 127-159
Summary and Conclusion....Pages 161-166
Back Matter....Pages 167-208
....