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Cultural Repercussions: Extending Our Knowledge about How Values of Trust and Confidence Influence Tax Structures within Europe


  • Rune Ellemose Gulev

    (University of Applied Sciences Kiel, Germany)

  • Hanna Lierse

    (Jacobs University Bremen, Germany)


Within a unified Europe that is heading towards ever more harmonization, it is interesting to examine why there exists such diversity in tax regimes among its countries. Is it possible that some of the decisions pertaining to taxation are based on latent cultural aspects? This study, set in a purely European context, seeks to analyze tax variations within Europe through the lens of cultural variations. Specifically, how trust, confidence and equality matter with regard to tax revenues and tax progressivity. Within this regard, we achieved strong results linking trust and confidence to higher tax revenues and higher tax progressivity. That is, where trust among societal members is low and confidence in public institutions is low, regimes opt for low tax revenues and lenient tax rates. It is argued that where mistrust is high, the issue of income distribution between societal members is likely to stay within the private or individual sphere. Conversely, countries with high trust among societal members exhibit higher levels of income distribution by delegating more responsibility to public institutions, reflected in higher tax revenues and more progressive tax structures.

Suggested Citation

  • Rune Ellemose Gulev & Hanna Lierse, 2012. "Cultural Repercussions: Extending Our Knowledge about How Values of Trust and Confidence Influence Tax Structures within Europe," International Journal of Management, Knowledge and Learning, International School for Social and Business Studies, Celje, Slovenia, vol. 1(1), pages 91-108.
  • Handle: RePEc:isv:jouijm:v:1:y:2012:i:1:p:91-108

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    References listed on IDEAS

    1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "Does Culture Affect Economic Outcomes?," Journal of Economic Perspectives, American Economic Association, vol. 20(2), pages 23-48, Spring.
    2. Tobias Koenig & Andreas Wagener, 2010. "Tax Structure and Government Expenditures under Tax Equity Norms," CESifo Working Paper Series 3205, CESifo Group Munich.
    3. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association;National Tax Journal, vol. 52(2), pages 269-304, June.
    4. Klarsfeld, Alain & Mabey, Christopher, 2004. "Management Development in Europe:: Do National Models Persist?," European Management Journal, Elsevier, vol. 22(6), pages 649-658, December.
    5. Wilson, John Douglas, 1999. "Theories of Tax Competition," National Tax Journal, National Tax Association, vol. 52(n. 2), pages 269-304, June.
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