How Much to Pay for Whom?: The Moderating Effect of Social Trust on Willingness to Pay Tax for ...

Full title: How Much to Pay for Whom?: The Moderating Effect of Social Trust on Willingness to Pay Tax for Welfare Provision

Dong-Kyun Im | Seoul National University

Jongmin Yang | Seoul National University

ABSTRACT

This study examines how citizens' intention to pay taxes changes depending on who they think are mainly protected by social welfare policies, and the moderating effect of social trust. Using a survey experiment method, we investigated how survey respondents’ willingness to pay taxes changes when the beneficiaries of social welfare were 1) themselves, 2) all Koreans, or 3) other people. In addition, social trust was measured in three ways (i.e., trust in others, trust from others, and trust among others), and what moderating effect each trust had was examined. Results show that in cases of pension, unemployment benefits, and medical insurance, people showed the highest levels of willingness to pay taxes when they were given the scenario in which individuals themselves are protected rather than all Koreans or other people are protected. However, this difference was sometimes not significant when individuals have high levels of trust toward others or their perceptions of trust among others were stronger, suggesting that social trust is associated with pro-social attitudes. However, perceptions of trust from others was often found to have opposite effects than other types of trust. This study provides implications for how to make more effective tax policies when tax increases for expanding the welfare state and the development of a tax-based social security system are needed.

KEYWORDS

social welfare, social trust, old age pension, unemployment benefits, healthcare

Survey Research, 23:3, 135-164,