Taxes are an important factor when it comes to financial decisions, such as investments, savings and financing. This applies to decisions made by private individuals as well as to decisions made in companies. It is therefore important that individuals making such decisions are aware of the actual tax burden, as misperceptions can lead to incorrect decisions and undesirable tax planning activities.
A comprehensive literature review by Kay Blaufus, Malte Chirvi, Hans-Peter Huber, Ralf Maiterth and Caren Sureth-Sloane shows that the actual tax burden is mostly misperceived and consequently affects decision-making. The team subsequently developed a Behavioral Taxpayer Response Model to explain determinants of tax misperception and effects on the decision-making behavior.
This paper is forthcoming in EAR:
There is a blog entry on "Accounting for transparency" about it: