Sunday, April 15, 2012

"Geithner made me do it"--The viral nature of cheating on your taxes

If you see your neighbor cheat and prosper, you will be more likely to try to follow suit, says Dan Ariely, based on an experiment he conducted in which the test subjects were exposed to blatant cheating and adjusted their behavior accordingly.  He points to the Tim Geithner case as an example of widespread public exposure to blatant cheating--Geithner clearly got away with tax evasion and taught the public a lesson that it's ok to cheat since if you get caught, you just pay up, no harm, no foul.

Ariely says his study shows:
"Seeing someone cheat for their own benefit and then get away with it clearly has an impact on our moral behavior—loosening it to a substantial degree.

So, what does this experiment means for paying taxes? It means that the more we see politicians—the people who make our laws—fudge their taxes (which seems to happen continually), the more likely the rest of us are to adjust our understanding of what is right and wrong about paying our taxes, and do the same."
But, he says, there is hope if you can psychologically distance the test subjects from the cheater: "if we don’t think that we belong to the same social group we might not feel more justified in our own moral indiscretions, and instead be extra careful not to be confused with this other, not so moral, social group."

He concludes that we just need to not identify with our cheating politicians, in order to avoid acting like them.   That's going to be tough since identifying with "us" is what politicians typically have to do to be politically successful.

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