Cognitive Scaffold

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MENTAL MODEL · M3775

Fiscal Illusion

Fiscal Illusion
SystemsHigh supportSystems Theory
Included
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

Governments use hidden revenue instruments (such as inflation, borrowing, and payroll withholding) to make taxpayers underestimate the true cost of public services, thereby supporting larger government expenditures.

SCAFFOLDING EFFECT

psychology

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Pain anesthesia. If you had to pay taxes in a lump sum at the end of each year, you would feel the pain and monitor the government; if it is automatically deducted monthly, you do not feel it. Governments tend to use financing methods that people do not feel.

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Hidden financing (inflation, borrowing, payroll withholding) reduces the pain of paying taxes, causing taxpayers to underestimate the true cost of public services, thereby acquiescing to larger expenditures.

MINIMUM ACTION

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Source support: Explicit

  • link
    en.wikipedia.orghttps://en.wikipedia.org/wiki/Fiscal_illusionZH · Explicit
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