Interesting article in today's New York Times: Taxes a Pleasure? Check the Brain Scan, by John Tierney:
The University of Oregon announced a new piece of research last week with a startling headline: “Paying taxes, according to the brain, can bring satisfaction.” Could this be true? The research is in the new issue of Science, so it’s got the right pedigree, but still. How could politicians have gotten it so wrong? Even the most liberal Democratic candidates never imagined a lot of voters whistling as they merrily write out checks to the IRS. ...
Some economists have attributed altruism to the “warm glow” effect — the pleasurable feeling of playing Lady Bountiful and basking in public admiration. They’ve argued that there is no such thing as “pure altruism.” But now the pure variety has been spotted in the brains of students, at least according to the new paper by a psychologist, Ulrich Mayr, and two economists, William T. Harbaugh and Daniel R. Burghart, all at the University of Oregon.
Their experiment was drawn up to remove some of the usual incentives for being charitable like the fear of looking stingy or the prestige of being named in the program of a charity dinner. Each student was given $100 and told that nobody would know how much of it she chose to keep or give away, not even the researchers who enlisted her in the experiment and scanned her brain. ... .
The brain responses were measured by a functional MRI machine as a series of transactions occurred. Sometimes the student had to choose whether to donate some of her cash to a local food bank. Sometimes a tax was levied that sent her money to the food bank without her approval. Sometimes she received extra money, and sometimes the food bank received money without any of it coming from her. Sure enough, when the typical student chose to donate to the food bank, she was rewarded with that warm glow: increased activity in the same ancient areas of the brain — the caudate, nucleus accumbens and insula — that respond when you eat a sweet dessert or receive money. But these pleasure centers were also activated, albeit not as much, when she was forced to pay a tax to the food bank. This doesn’t mean that the student, or anyone else, would necessarily enjoy writing a check to the IRS that would be spent on plenty of programs less appealing than a food bank. It is more like the tax collected by a state lottery that dedicates its profits to schools.
The paper is Neural Responses to Taxation and Voluntary Giving Reveal Motives for Charitable Donations, 316 Science 1622 (6/15/07). Here is the abstract:
Civil societies function because people pay taxes and make charitable contributions to provide public goods. One possible motive for charitable contributions, called "pure altruism," is satisfied by increases in the public good no matter the source or intent. Another possible motive, "warm glow," is only fulfilled by an individual's own voluntary donations. Consistent with pure altruism, we find that even mandatory, tax-like transfers to a charity elicit neural activity in areas linked to reward processing. Moreover, neural responses to the charity's financial gains predict voluntary giving. However, consistent with warm glow, neural activity further increases when people make transfers voluntarily. Both pure altruism and warm-glow motives appear to determine the hedonic consequences of financial transfers to the public good.
(Hat Tip: Gerry Beyer & Bryan Camp.)