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Illegal, Immoral, Fattening or What?: How Deterrence and Responsive Regulation Shape Tax Morale

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Author Info

  • Lars P. Feld

    ()
    (Faculty of Business Administration and Economics, Philipps Universitaet Marburg)

  • Bruno S. Frey

    (University of Zürich)

Abstract

The traditional economic approach to tax evasion does not appear to be particularly successful in explaining the extent of tax compliance. It is often argued that reciprocity norms which establish a fiscal exchange between the state and the citizens shape tax morale to a large extent. In that respect, a case study of Switzerland may be useful because the small size of the cantons and their direct democratic political systems procedurally establish a close exchange relationship between taxpayers and tax authorities. In this paper, evidence is discussed on how tax morale in Switzerland evolved over time. In addition, the impact of economic, legal, socio- demographic, psychological and institutional factors on Swiss tax evasion is analyzed. It can be concluded that Switzerland’s system of responsive regulation increases tax morale.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/gelbereihe/artikel/2004-26-IllegalDP_gesamt.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series Marburg Working Papers on Economics with number 200426.

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Length: 27 pages
Date of creation: 2004
Date of revision:
Publication status: Forthcoming in Friedrich Schneider and Chris Bajada (eds.), Size, Cause and Consequences of the Underground Economy, 2004.
Handle: RePEc:mar:volksw:200426

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Related research

Keywords: Tax Evasion; Tax Morale; Deterrence; Responsive Regulation.;

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References

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  1. Alm, James & McClelland, Gary H. & Schulze, William D., 1992. "Why do people pay taxes?," Journal of Public Economics, Elsevier, vol. 48(1), pages 21-38, June.
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Cited by:
  1. Mariana Bode & Oliver Budzinski, 2005. "Competing Ways Towards International Antitrust: the WTO versus the ICN," Marburg Working Papers on Economics 200503, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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