People Who Pay Higher Taxes Are Happier: Study

They say money can't buy you happiness, but what about forking over some of it to the government?

Higher taxes are correlated with higher life satisfaction, according to a November study by six economists affiliated with the Institute for the Study of Labor in Bonn, Germany. The economists analyzed data about 25,000 Germans between 1985 to 2010, where respondents answered the question, "How satisfied ed are you with your life, all things considered?" on a scale of 0 to 10.

If only lawmakers understood as much. With the Bush tax cuts scheduled to expire at the end of the year, the Obama administration and Congressional Republicans continue to wrangle over which income groups should take the hit.

It is unclear why people who pay higher taxes are happier. But the study suggests a few reasons: People enjoy the public services higher taxes pay for, some view taxes as a social obligation and lower-income people value the protection that government can provide against poverty.

Other research also indicates public goods can make people happier. A recent study by Skandia International found that people in European countries with strong safety nets need less money to be happy.

Paying higher taxes isn't the first thing researchers have tried to link to happiness. Studies have found that friends, respect, waking up early and spending money on others are associated with happiness too. Of course, it can be hard to figure out whether happiness is a cause or effect in such studies, or if other factors get in the way.

(Hat tip: The Wall Street Journal.)