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Procedural Fairness and Taxpayers�� Response Evidence from an Experimen

Listed author(s):
  • Byung-hill Jun

    (Hankuk University of Foreign Studes)

  • Myeonghwan Cho

    (Sungkyunkwan University)

  • Myung-Ho Park

    (Korea Institute of Public Finance)

We perform an experiment to investigate how the fairness of decision making procedures affects taxpayers�� income reporting behavior. According to our experiment, individuals tend to report more income, and thus evade less tax when majority voting determines a tax rate structure than when a dictatorship determines a tax rate structure. We also find that such a positive effect of majority voting occurs mainly through individuals dissatisfied with the current tax rate structure. These findings hint at a channel through which procedural fairness works to improve tax compliance.

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File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-20151231-31-2-03.pdf
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Article provided by Korean Economic Association in its journal Korean Economic Review.

Volume (Year): 31 (2015)
Issue (Month): ()
Pages: 301-326

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Handle: RePEc:kea:keappr:ker-20151231-31-2-03
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  10. Kim, Chung Kweon, 2002. "Does fairness matter in tax reporting behavior?," Journal of Economic Psychology, Elsevier, vol. 23(6), pages 771-785, December.
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  14. Kastlunger, Barbara & Dressler, Stefan G. & Kirchler, Erich & Mittone, Luigi & Voracek, Martin, 2010. "Sex differences in tax compliance: Differentiating between demographic sex, gender-role orientation, and prenatal masculinization (2D:4D)," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 542-552, August.
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