A lack of transparency is leading to a fiscal illusion where citizens underestimate their tax burdens and the cost of government.

In recent years levels of public trust in government have fallen dramatically, at the same time as opposition to high levels of public spending has also grown. Whitney B. Afonso looks at the role of fiscal illusion in public support for government services. She writes that when citizens face multiple tax instruments including sales, excise, and property taxes, which are often spread out over long periods, the actual tax burden they face is often underestimated. When this occurs, people may perceive their tax burden to be lower than it is, and this can encourage government to spend more on public services. With this in mind, she argues that governments need to be more transparent in informing their citizens as to the scope, costs, financing, and benefits of government services.