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Discontent with taxes and the timing of taxation : experimental evidence

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  • Radu Vranceanu

    (ESSEC Business School and THEMA (UMR 8184) - ESSEC Business School - THEMA - Théorie économique, modélisation et applications - CNRS - Centre National de la Recherche Scientifique - CY - CY Cergy Paris Université)

  • Angela Sutan

    (BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC))

  • Delphine Dubart

    (ESSEC Business School)

Abstract

This paper reports results from a linear sanction cost variant of the power-to-take game, with implications for tax policies. We compare a pay-as-you-earn (PAYE) system with an ex-post taxation system in which payroll taxes are collected at the end of the fiscal year. Dissatisfaction with taxation, as proxied by the sanction in the power-to-take game, is significantly higher in an ex-post taxation system compared with the PAYE system. However, in anticipation of the higher sanction, the "tax authority" will not apply lower taxes in the former system. Communication does not decrease dissatisfaction in a significant manner, and it is not used extensively by participants.

Suggested Citation

  • Radu Vranceanu & Angela Sutan & Delphine Dubart, 2019. "Discontent with taxes and the timing of taxation : experimental evidence," Working Papers hal-01282724, HAL.
    • Handle: RePEc:hal:wpaper:hal-01282724
    Note: View the original document on HAL open archive server: https://essec.hal.science/hal-01282724v2
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    References listed on IDEAS

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    More about this item

    Keywords

    Power-to-take game; Experiments; Tax systems; Dissatisfaction with taxes; Pay-As-You-Earn; Fiscalité; Impôt sur le revenu; Prélèvement à la source; Effet de dotation; Expérience;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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