Social Acceptability of Tax and Transfer Schemes

In this paper we argue that the equity-efficiency framework usually used by economists to analyse taxation, based on rational individual carefully calculating costs and benefits, is incomplete because it pays little attention social acceptability of taxation. This not deny individuals pursue their own self-interest, but say attitudes towards taxation are more complex than that. They also depend factors like trust in government, perceptions fairness, feelings solidarity reciprocity ideas. These need be factored when policy proposals made reform specific taxes or subsidies, even so they involve reforming various subsidies at same time.