How Taxpayer Perceptions Influence the Utilization of Charitable Tax Credits

Le résumé fourni par la source

This study empirically investigates the impact of taxpayers’ subjective perceptions on the active utilization of charitable tax credits as a key behavior in leveraging tax policies, shifting the focus beyond tax compliance. Using a lagged panel structure from the 10th and 11th waves of the National Survey of Tax and Benefit (NaSTaB) data, a Tobit regression model was estimated with marginal effects to account for the censoring of the dependent variable. The findings reveal that charitable tax credit utilization is shaped by dual drivers：behavioral factors (taxpayer perceptions) and structural factors (economic conditions). Among the behavioral factors, only a positive perception of tax authorities’ service－providing efforts significantly increased credit utilization, while taxpayers with conservative political orientations claimed significantly lower credit amounts than those with progressive political orientations. Regarding structural factors, both tax liability and disposable income exhibited positive but inelastic relationships (coefficients＜1) with the claimed credit amount. This empirical evidence suggests that adjusting economic incentives, such as income levels or tax rates, may have limited effectiveness in promoting the utilization of the tax credit system due to this low sensitivity. Furthermore, non－standard income groups－including precarious workers, freelancers and the self－employed－utilized significantly fewer tax credits than permanent employees, indicating that income instability hinders institutional accessibility. These findings provide an empirical foundation for tax policy refinement and offer policy implications for a multi－layered tax design, including improving perceptions of tax authority services, ensuring ideologically neutral policy designs, and enhancing institutional accessibility for non－standard income groups

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