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The American Accounting Association (AAA) has published a study that indicates that American taxpayers "are willing to accept a larger share of the burden required to reform the Social Security system as their concern about the future sustainability of the Social Security worsens." However "this willingness to accept a larger share of the burden does not begin until participants' concerns reach a very high level...Prior to reaching that very high level of concern, the data...indicate there is no change in [people's] willingness to accept a larger share of the burden."
The study, entitled "The Effect of Accounting Information on Taxpayers' Acceptance of Tax Reform," is in the spring 2012 issue of the Journal of the American Taxation Association, published twice a year by the AAA. The study's co-authors are James J. Maroney, Cynthia M. Jackson, Timothy J. Rupert, and Yue (May) Zhang, all of Northeastern University.
The authors state: "Given the urgency of this problem, our results may provide some guidance to policy makers as they consider possible reforms to the Social Security system and how to communicate the need for these reforms to taxpayers...While this information may heighten taxpayers' concern about the sustainability of the system, it also appears to increase their acceptance of traditionally unpopular reform measures." Accrual-basis information might also be featured, they add, in "the annual benefits statement ('Your Social Security Statement') sent to workers, so as to alert taxpayers about the financial condition of the Social Security fund."
Adds Prof. Rupert: "The crux of our study is that people could very well respond to a clear and forthright presentation of this problem much as they have responded in the past to such national crises as wars or natural disasters."
The new study consists of an experiment involving 159 undergraduate and graduate accounting students, "an important group to examine," in the researchers' words, "because it is likely that family and friends would seek their expertise and guidance to help them understand potential tax reform measures." Subjects were randomly divided into three groups as part of a project, they were told, "to study taxpayers' opinions about the Social Security system and taxpayers' attitudes about potential changes to the Social Security system."
In conclusion, the professors put it this way: "Participants in our study appear to be exhibiting self-sacrificing behavior rather than self-interested behavior as their concern about Social Security's sustainability increases...However, we also find that as the participants' concern...reaches an extremely high level, their willingness to accept a larger share of the burden needed to reform the Social Security system begins to decline. Our finding is also consistent with [the] suggestion that when a crisis is believed to be so overwhelming as to induce feelings of helplessness, it may lead to self-interested behavior. If self-interested behavior does arise, Congress may need to act very soon to reform the Social Security and Medicare systems before younger taxpayers begin to believe the system is beyond repair."
More information about the study, including methodology and key findings, can be found in the press release. Information about AAA publications is available online. |
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