The Influence of Tax Labeling and Tax Earmarking on the Willingness to Contribute — A Conjoint Analysis

We apply conjoint analysis to study the influence of tax labeling and tax earmarking on German taxpayers’ willingness to contribute. We show that labeling and earmarking effects can substantially increase participants’ willingness to contribute, and we analyze how these effects interact. These results add to the explanation of the variety in tax labels and provide implications for tax policy on further reforms of the tax and contribution system. Labeling and earmarking contributions are important instruments in selling policies and increasing tax revenue.