Expanding the Theory of Tax Compliance from Individual to Group Motivations
AbstractTaxpayers face well-known and well-identified individual motivations in their compliance decisions, motivations that originate with the standard economic model of tax evasion in which financial incentives are shaped by audit, penalty, and tax rates. However, there is growing evidence that these individual incentives, while important, are not always decisive. Individuals do not always behave as the selfish, rational, self-interested individuals portrayed in the standard neoclassical paradigm, but rather are often motivated by many other factors that have as their main foundation some aspects of social norms, morality, altruism, fairness, or the like, factors that I broadly and no doubt imprecisely lump together as group motivations. I argue that the compliance puzzle can be explained, at least in part, by expanding the standard analysis of individual compliance behavior to incorporate the important ways in which individual decisions are shaped by group motivations. I also provide empirical and experimental evidence to support these arguments, and, I suggest â€“ and predict â€“ some promising lines of future research.
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Bibliographic InfoPaper provided by Tulane University, Department of Economics in its series Working Papers with number 1309.
Length: 24 pages
Date of creation: Feb 2013
Date of revision:
tax evasion; behavioral economics; experimental economics;
Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
This paper has been announced in the following NEP Reports:
- NEP-ACC-2013-03-30 (Accounting & Auditing)
- NEP-ALL-2013-03-30 (All new papers)
- NEP-CBE-2013-03-30 (Cognitive & Behavioural Economics)
- NEP-CDM-2013-03-30 (Collective Decision-Making)
- NEP-EXP-2013-03-30 (Experimental Economics)
- NEP-HPE-2013-03-30 (History & Philosophy of Economics)
- NEP-IUE-2013-03-30 (Informal & Underground Economics)
- NEP-PUB-2013-03-30 (Public Finance)
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