A new study says that might just be how it works, as long as the taxes are progressive. The study was conducted in 54 nations with over 59,000 respondents. The polling tracked the expressed well being of respondents and then checked for correlations in taxation systems. The end result? On average, those who lived in a country with a highly progressive tax system reported a higher level of quality of life, more positive daily experiences, and fewer negative ones. Overall, people are happier the more progressive their tax system is.
It's an academic paper and the authors don't jump to any political conclusions, but they do provide at least one plausible explanation. The study notes that simply increasing government spending does not increase overall happiness. But people are happier in countries with higher levels of progressive taxation because they are more satisfied with basic government services, such as quality of education and health care.