Fiscal Illussion As Public Economy Failure: A Study on the Aegean Region
Ulvi Sandalcı, İnci SandalcıWith the fiscal illusion, which is seen as a failure of the public economy, individuals cannot fully and accurately perceive their tax burden. As a result, more public good services are demanded and expenditures increase. The excessive increase in public expenditures returns toindividualsbyincreasingtaxburdens.Fiscalillusions,which arise due to reasons such as the complexity of the tax system, automatic increases in taxes, and the preference for borrowing or printing money instead of taxation, prevent the individual and the state from making rational decisions. Failure to makerational decisions negatively affects the economic and financial power of both the individual and the state, leading to a decrease in social welfare. Therefore, it is important to determine the level of financial illusion and minimise it. The current study determines the level of financial illusion by the survey method and to present various policy recommendations according to the results. In this context, f inancial illusion levels were measured by applying a survey to 608 individuals in the Aegeanregion. Thedata obtained from the survey wereanalysed using the SPSS 22 package programme. According to the results of the study, the financial illusion level of the individuals participating in the survey is above average. However, the level of financial illusion increases as age and income level increases and, decreases as education level increases. In addition, it was determined that the financial illusion level of men, singles and Aydın was higher than their groups
Kamu Ekonomisi Başarısızlığı Olarak Mali Yanılsama: Ege Bölgesi Üzerine Bir Araştırma
Ulvi Sandalcı, İnci SandalcıKamu ekonomisi başarısızlığı olarak görülen mali yanılsama ile bireyler vergi yüklerini tam ve doğru olarak algılayamamaktadır. Bunun bir sonucu olarak da daha fazla kamusal mal ve hizmet talep edilerek harcamalar artmaktadır. Kamu harcamalarında ortaya çıkan aşırı artış da tekrar vergi yüklerinde artışa neden olarak bireylere geri dönmektedir. Vergi sisteminin karmaşıklığı, vergilerdeki otomatik artışlar, vergileme yerine borçlanma veya para basmanın tercih edilmesi gibi nedenlerle ortaya çıkan mali yanılsama birey ve devlet açısından rasyonel kararlar almaya engel olmaktadır. Rasyonel karar alınamaması da hem birey hem de devletin ekonomik ve mali gücünü olumsuz yönde etkileyerek toplumsal refahın azalmasına yol açmaktadır. Bundan dolaydır ki mali yanılsama düzeyinin tespit edilerek en aza indirilmesi önem arz etmektedir. Çalışmanın amacı mali yanılsama düzeyinin anket yöntemiyle tespit edilerek ortaya çıkan sonuca göre çeşitli politika önerileri sunmaktır.BukapsamdaEgebölgesinde608bireyeanketuygulanarakmali yanılsama düzeyleri ölçülmüştür. Anket sonucu elde edilen veriler SPSS 22 paket programı aracılığıyla analiz edilmiştir. Çalışmanın sonucuna göre ankete katılan bireylerin mali yanılsama düzeyi ortalamanın üstünde yer almaktadır. Bununla birlikte yaş ve gelir düzeyi arttıkça mali yanılsama düzeyinin arttığı, eğitim düzeyi arttıkça ise azaldığı sonucuna ulaşılmıştır. Ayrıca erkekler, bekarlar ile Aydın’ın mali yanılsama düzeyinin gruplarına göre daha yüksek olduğu tespit edilmiştir.
Since the existence of people, their economic relations with each other have always maintained their existence at certain levels. These relationships have been in constant change depending on the social life. As a matter of fact, there are social, cultural, economic, financial, administrative, political, etc. factors that determine social life. These factors have also affected the existing economic understanding and relations. While it is argued that the private sector’s share in the economy should be superior in certain periods, it is argued that the state should be superior in the total economy in other periods. While one of the main justifications of economic ideas that argue that the state should be in a dominant position in the economy is market failure, the most important reason of those who argue that the private sector should be in a dominant position is the failure of the public economy. With the failure of the public economy, it is advocated that the state should take as little part as possible in the total economy, and it is thought that the state should leave the economy completely to the market, except for some basic areas that the market cannot fulfil. Fiscal illusion is one of the main areas that economic movements that claim the failure of the public economy see as unsuccessful. Fiscal illusion occurs whentaxpayers are unaware of certain taxes or when some public services are financed through borrowing. With this fiscal illusion, taxpayers may unknowingly or mistakenly demand more public expenditure, leading to a further increase in their tax burden. Fiscal illusions that arise due to reasons such as progressive tax rates, the complexity of the tax system, and the preference for borrowing or printing money instead of taxation should be minimised as much as possible in the eyes of taxpayers. As a matter of fact, in societies where financial illusions are not seen or are at the minimum level as possible, both individuals and the public will make effective and efficient choices, will be able to see and question the results of their choices transparently, and this will contribute to the legitimacy of public activities based on rational preferences and the participation of individuals in management. As a result, the main goal of increasing social welfare will be achieved. For this reason, eliminating or eliminating financial deception in order to achieve objectives such as ensuring public expenditures are effective and efficient, saving public resources correctly and where necessary, spending resources in line with the needs of individuals, ensuring financial transparency and accountability in the public sector, and reducing tax burdens of individuals should be reduced to a minimum. For this purpose, it is necessary to determine the level of financial deception that currently exists in society and to determine the areas of action according to this result. For this purpose, the level of financial deception was investigated using the survey method in the study.
The existence of theoretical studies on the financial illusion hypothesis has been ongoing for a long time. Since the hypothesis in question has significant effects on both the public and the individuals, the subject has been discussed on a broad theoretical basis and has been constantly renewed according to the conditions of the day. Many effects of financial illusion on the individual and the public have led to the practical aspects of the subject being studied from time to time, as well as its theoretical aspects. However, the continuous updating of empirical studies on fiscal illusion, which has the power to directly affect many basic fiscal concepts such as fiscal transparency, transparency, tax compliance, budget balance, accountability and tax awareness, and is seen as a state failure, makes it possible for the theoretical aspect of the concept in question to be more accurate. It is important to address this problem and offer solutions to it. In order to contribute to the field in question, a literature review was included in the research to compare previous studies in the literature along with this empirical study conducted specifically in Turkey. There are many empirical and theoretical studies on financial deception, which is when individuals fall into deception and demand more public services as a result of their failure to fully understand the costs and prices of public services for various reasons such as f inancial ignorance, financial anaesthesia, incomplete information, personal interest, financing of goods and services in different ways. has been made. The basis of these studies is to minimise as much as possible the financial deception that causes the public sector to grow more than necessary, individuals to bear a higher tax burden, leaves the door open to waste and extravagance in the public sector, and deteriorates the public financial structure, especially fiscal transparency and accountability. As a matter of fact, in societies where financial deception is low, individuals’ rights to have a say in, control and object to financial decisions will be strengthened. This will contribute to the effective and efficient functioning of the public sector by leading to more effective public decisions. For this reason, the level of f inancial illusion in societies and the course of this level are essential. The aim of this study, which focuses on financial illusion, is to measure society’s perception of financial illusion in the Aegean region.
The main population of the study consisted of individuals residing in the Aegean Region (İzmir, Manisa, Denizli, Aydın, Muğla, Afyonkarahisar, Uşak and Kütahya). Considering the population and geographical size of the main mass, the survey was conducted in a total of 6 provinces, excluding Izmir, which is the province with the best representation in the region in terms of social, economic and population, and 2 provinces were randomly excluded from the other 7 provinces. Because of random selection, the provinces where the survey was conducted were determined as İzmir, Aydın, Manisa, Denizli, Muğla andKütahya.Inaddition, an additional geographical limitation was made and the survey was conducted in the centres of these provinces. Another limitation is the age demographic variable. Accordingly, in general, individuals aged 20 and over have social, economic, political, cultural, etc. Since their situation is clearer and their tax liabilities generally become clearer after this age, a limitation has also been placed on the age demographic variable. Stratified sampling was chosen as the sample type in the study due to limited resources and difficulty in reaching the entire population. A survey was applied to 608 taxpayers residing in the Aegean Region (İzmir, Manisa, Aydın, Muğla, Denizli and Kütahya). The financial illusion perception of the taxpayers who participated in the survey wasdetermined to be 3.2790. Since the scale used in the study is a 5-point Likert scale, the value 3 is set as the midpoint (50%). According to this value, the financial deception levels of the participants were found to be above average. As a result of the analysis made according to age, it was found that the level of perception increases as age increases; As a result of the analysis made according to the type of education, it was found that as the level of education increases, the level of perception decreases. As a result of the analysis made according to gender, the level of financial illusion is highest in men, as a result of the analysis made according to marital status, the level of financial delusion is highest in single people and lowest in divorced/widowed people, and as a result of the analysis made according to income level, individuals’ income levels and financial illusion levels move in the same direction. According to the frequency results of the province of residence, the province with the highest level of financial illusion is Aydın, followed by Denizli, third Manisa, fourth Kütahya, fifth Muğla, and İzmir is in the last place. In the analysis of differences between groups based on profession, no statistically significant relationship was found. Because of the study, it is revealed that taxpayers’ f inancial illusion levels are above average and this is an issue that needs tobeaddressedandresolvedurgently. According to this; it is necessary to ensure that the tax system is structured in a way that allows taxpayers to understand the taxes and tax burdens for which they are responsible more easily and comfortably, to increase financial literacy, and to ensure f inancial transparency and accountability, thus ensuring that taxpayers are aware that they are responsible for financing the public expenditures they demand. In this way, the level of financial illusion existing in society will decrease. In a situation where fiscal illusions do not exist or are minimised, both individuals and the public will make effective and efficient choices, will be able to see and question the results of their choices transparently, and this will contribute to the legitimacy of public activities and the participation of individuals in management based on rational preferences. At the same time, the effectiveness and efficiency of public expenditures will increase and the waste of public resources will be prevented. As a result, the main goal, which is to increase social welfare, will be achieved.
