Ask Ariely: On Paying Your Taxes, Treating Your Friends, and Suiting Yourself

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

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Hi, Dan.

With the recent changes in the tax code, Americans have been debating what rate high earners should pay. Here’s a thought experiment: How about offering those in the highest bracket a choice of rates—say, 37%, 40%, 45% even 50%. They could choose to pay whatever rate they wanted—but they would have to make their choice public. So politicians, celebrities and CEOs who talk about the need for fair taxes would have to walk the talk—and pay up. This altruistic option might even make them feel good.

—Pete 

I like this creative approach. I would suggest adding some social-media coordination to the plan by obliging people to say, well before taxes are due, how much they plan to pay. I suspect that many of the superrich wouldn’t mind paying more taxes as long as their superrich friends paid the same amount (or more). After all, if everyone were to pay more, relative wealth would remain the same.

And if a few altruistic billionaires chose high rates, as they probably would, their peers might feel social pressure to follow suit. The more news coverage, the more likely this outcome. Though Congress is unlikely to try out this approach anytime soon, communities could experiment by trying some version of it with property taxes.

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Dear Dan,

From time to time I treat a friend or my significant other to dinner, thanks to your advice that the psychological pain of spending $80 is less than the pain of each of us spending $40. My question is: When should I tell my friend it’s my treat? When I invite them? When the bill comes? What would maximize my guest’s enjoyment?

—Colin 

You are absolutely right about the pain of paying. If your goal is to maximize your dinner partner’s enjoyment, I would let them know it’s your treat as soon as you make the invitation. That way, your guest won’t even experience the anticipated pain of paying for anything. It’s true that your guest, knowing dinner is on you, might order another dessert or glass of wine, but that’s a small price to pay.

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Dear Dan,

I recently started working at a company that requires employees to wear suits, and I find them uncomfortable. Can you help me understand the logic for wearing them?

—Joseph 

In my mind, suits represent everything wrong with modern society. They’re basically an expensive school uniform. The lack of choice does make suit purchases easier, and since people wearing suits look more or less the same, the clothing works as a kind of leveler in looks, ensuring that no one looks more interesting or exciting.

But suits kill sartorial creativity and individuality, and as you say, they’re uncomfortable. They are a prime example of our tendency to pick the unpleasant, uncreative option as long as it’s easy and makes us all look identical. My advice to you: Rebel, and if you succeed, most of your co-workers will thank you.

See the original article in the Wall Street Journal.