How does progressivity impact tax morale? Experimental evidence across developing countries

This paper examines how the progressivity of taxes and government transfers impacts tax morale through a randomized survey experiment with over 30,000 respondents across eight developing countries. Respondents increased (decreased) their tax morale when they received accurate information that taxes in their country are progressive (not progressive). These effects were predominantly driven by respondents in cases where the information they received was counter to their prior beliefs and/or consistent with their preferences. These results suggest changes in policies that increase (decrease) the progressivity of tax systems may also lead to increases (decreases) in tax compliance. •Tax morale increases when people receive information that taxes are progressive.•Tax morale decreases when people receive information that taxes are not progressive.•Most people prefer taxes to be progressive, even those who believe they are rich.•Increasing tax progressivity may lead to increases in tax compliance.