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Reciprocal relationships in tax compliance decisions

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  • Cécile Bazart

    ()
    (LAMETA - Laboratoire Montpelliérain d'Économie Théorique et Appliquée - Université Montpellier I - CNRS : UMR5474 - Institut national de la recherche agronomique (INRA) : UR1135 - Centre international de hautes études agronomiques méditerranéennes [CIHEAM])

  • Aurélie Bonein

    ()
    (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie)

Abstract

Reciprocity considerations are important to the tax compliance problem as they may explain the global dynamics of tax evasion, beyond individual tax evasion decisions, toward a downward or upward spiral. To provide evidence on reciprocity in tax compliance decisions, we have conducted a laboratory experiment in which we introduced two types of inequities. The first type of inequity is called vertical, because it refers to inequities introduced by the government when it sets different fiscal parameters for identical taxpayers, while the second type of inequity is called horizontal because it refers to the fact that taxpayers may differ in tax compliance decisions. In this setting, taxpayers may react to a disadvantageous or advantageous inequity through negative or positive reciprocal behaviors, respectively. Our results support the existence of negative and positive reciprocity in both vertical and horizontal cases. When both inequities come into play and may induce reciprocal behaviors in opposite directions, the horizontal always dominates the vertical.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number halshs-00867505.

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Date of creation: 2014
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Publication status: Published, Journal of Economic Psychology, 2014, 40, Special Issue on Behavioral Dynamics of Tax Evasion, 83-102
Handle: RePEc:hal:journl:halshs-00867505

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Keywords: Behavioral economics; experimental economics; fairness; tax evasion; tax compliance;

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Cited by:
  1. Andrea Szabo & Gergely Ujhelyi, 2014. "Can Information Reduce Nonpayment for Public Utilities? Experimental Evidence from South Africa," Working Papers, Department of Economics, University of Houston 2014-114-31, Department of Economics, University of Houston.

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