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Tax Morale, Tax Evasion, and the Shadow Economy

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  • Gebhard Kirchgässner

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Abstract

Under which conditions is moral justification of taxation possible? This question does not only interest philosophers and economists from a scientific point of view, but can have considerable practical relevance as well because the willingness of citizens to pay taxes may depend upon whether they consider taxation to be morally justified or not. We first consider theoretical arguments on the role of tax morale, and when tax evasion might be considered as justified by citizens or not. Then we ask how tax morale can be measured. Next, we discuss the role of tax morale for the shadow economy, before determinants of tax morale and empirical results for the impact of tax morale on tax compliance are discussed. For a high tax morale, institutional and cultural factors are at least as important as economic incentives.

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Bibliographic Info

Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2010 with number 2010-17.

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Length: 26 pages
Date of creation: May 2010
Date of revision:
Handle: RePEc:usg:dp2010:2010-17

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Keywords: Tax morale; tax evasion; principles of taxation; trust; direct democracy; federalism;

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