C2

Roger Haineault

Stumble Upon

del.icio.us

Digg

Facebook

Print

Email

Speak Up

For those who work with computers, you know the challenge of getting new technology.

A laptop computer is virtually never more than a foot away from my hands -- a funny visual if you think about it -- but nonetheless true. And when it's not a computer, it's the combination PDA/cellphone/camera/nutcracker with the ubiquitous Windows Mobile operating system.

Anyway, I ended up with a new Dell notebook, and I've been busy transferring files from my relatively older, but still reliable Compaq.

Which is when I rediscovered a research piece that I wrote about that bears repeating as we approach the federal election next week.

In a report dryly entitled Neural Responses to Taxation and Voluntary Giving Reveal Motives for Charitable Donations ("Science", Vol. 316, No. 5831) by William T. Harbaugh, Ulrich Mayr and Daniel R. Burghart, the University of Oregon researchers wanted to scientifically study whether there was measurable brain activity when people paid their taxes or provided donations to charity.

Egoism is where people are motivated by self-interest, even when it appears to be altruistic (which can be roughly defined as the sacrificing of a personal benefit in favour of conveying it to others).

According to Harbaugh, altruism could not be traced in the brain -- until now. The authors contend that society functions because people pay taxes and make charitable contributions that enhance the public good.

There are two main rationales as to why individuals contribute to charity. The first is altruism -- people feel good when they give so that others may benefit. The second is ego-driven -- giving to the less fortunate provides recognition, thereby eliciting a warm glow within the donor. Economists have been curious: if money is a good thing and provides increasing value to someone's life, why is there a motivation to give it away?

The study's authors state that "this is the first evidence we know of demonstrating that mandatory taxation for a good cause can produce activation in specific brain areas that have been tied to concrete, individualistic rewards."

They went on to say that "this supports the existence of a purely altruistic motive: the larger a person's neural response to increases in the public good, no matter the source, the more likely they will give voluntarily."

Findings in studies such as these could revolutionize tax policy and the collection of revenue. This research would lead one to believe that pure altruism and warm-glow egoism work together so a perceived good cause, no matter how publicly funded it is, can attract additional dollars directly through donation in a piggyback fashion.

Governments may be able to make taxpayers feel good about paying when they directly identify on a tax return where specific revenue is directed. These initiatives can then put together public fronts that encourage warm-glow contributions as supplements.

What does this have to do with the price of tea in China, one might ask? The Globe and Mail has a regular feature that keeps tabs on the price of the promises of the major political parties. As of last week, they reported that the Liberals had committed $54.5 billion, the NDP $51.6 billion and the Greens $90 billion over four years. The Conservatives, on the other hand, indicate spending to be $6.5 billion over five years.

Taken together, and considering the shape of the global economy, arguably the party the polls say are going to be elected have recognized that they don't want to be caught choking on their promises. On the other hand, if the new government is comprised of some variation of the other parties, there will either be lots of backpedalling, or as this study shows, a requirement to detail every specific good deed funding point on your next tax return, or both.

* Roger Haineault is with Tax Help/Help 4 Taxes. He can be reached by e-mail at roger@help4taxes.ca or by calling 855-HELP (4357). His column appears Tuesdays.