The relationship between welfare benefits experience and perceived tax burden

We empirically analyzed how taxpayers' welfare experiences form their perceived tax burden using National Survey of Tax and Benefit. Estimation results shows that the degree to which people felt that their tax burden was excessive tended to decrease significantly when they had an experience receiving welfare benefits. Specifically, the size of effect remains robust to model specification which is around 3.0-3.3%. We also analyzed the effect of each welfare program on the perceived tax burden. Significant effects were found only in the National Basic Living Security System benefit policy, childcare/birth incentive policy, and other cash support policies. Our findings emphasize the role of reciprocity in making perceived tax burden. These results provide a policy implication that tax compliance can be promoted by making taxpayers recognize welfare benefits that they can receive.