Future Orientation and Taxes: Evidence from Big Data

31 Pages Posted: 25 Feb 2015

See all articles by Matthias Petutschnig

Matthias Petutschnig

Vienna University of Economics and Business

Date Written: February 2015

Abstract

The paper analyses whether various aspects of a country’s tax system have a positive or negative influence on individuals’ attitudes towards the future. These attitudes are measured by an analysis of Google search queries derived from Google Trends which allow constructing an online future-orientation index for a sample of 58 countries. There results of this analysis indicate that capital gains taxes and value added taxes discourage future-oriented behaviour. Also, high personal income tax rates at the lowest income brackets discourage, whereas – surprisingly – the top marginal rates could positively influence an individual’s future orientation. The paper contributes to existing research in three ways: First, it expands the existing tax literature by providing evidence that taxes can influence very fundamental personal values, such as individuals’ general attitudes towards their future. Second, it contributes to a vast body of cross-cultural studies on future orientation by introducing tax law. Third, by using Internet search patterns the paper introduces these large, automatically gathered data sets into scientific tax research, thereby opening the possibility for further research opportunities.

Keywords: Future orientation, Personal income tax, VAT, Capital gains tax, Google searches

JEL Classification: H24, H25, L26, Z13

Suggested Citation

Petutschnig, Matthias, Future Orientation and Taxes: Evidence from Big Data (February 2015). WU International Taxation Research Paper Series No. 2015 - 08. Available at SSRN: https://ssrn.com/abstract=2563548 or http://dx.doi.org/10.2139/ssrn.2563548

Matthias Petutschnig (Contact Author)

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Building D 3
Vienna, Wien A-1020
Austria

HOME PAGE: http://www.wu.ac.at

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