Impact of income tax on happiness: evidence from the United States

ABSTRACT

The present work considers the level of demonstrated happiness and unhappiness within groups, the latter measured by the conditional probability of suicide within groups facing an income tax rate and those without. Using US data for the year 2004, our results show that individuals have lower rates of suicide or are ‘happy’ when they do not pay income taxes than those who pay.

KEYWORDS:

• Happiness
• state income tax
• suicide

JEL CLASSIFICATION:

• A10
• I10

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Corrigendum

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The 2003 NCHS Multiple Cause of Death Data is used as a robustness check. The results are not sensitive irrespective of whether the 2006 or 2010 data are used.

² We select 2004 since it is the latest year for which the state of death occurrence is reported by the states.

³ Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming had no state income tax in 2004. Data taken from taxfoundation.org