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Do perceptions about government spending affect willingness to pay taxes? We test
this hypothesis with a natural field experiment that focuses on the allocation of property
taxes to public schools. Our results show that taxpayers often misperceive the
destination of their tax dollars. By introducing shocks to households鈥� perceptions via
an information-provision experiment, we find that perceptions of how tax dollars are
used significantly affect the probability of filing a tax appeal. Moreover, the effects
are consistent with reciprocal motivations: individuals are more willing to pay taxes if
they believe that the government services funded by those taxes will provide greater
personal benefit.
