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Moral Suasion: An alternative tax policy strategy? Evidence from a controlled field experiment in Switzerland

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  • Benno Torgler

Abstract

In a controlled field experiment in Switzerland this paper analyses the effects of moral suasion on the timely paying and filling out of the tax form 2001, and the honesty regarding the declaration of domestic income from capital gains, lottery winnings, and certain insurance benefits. Comparisons of different tax filling years and multiple regression estimations have been done using these three factors as dependent variables to check if there is a significant difference between the control group and the treatment group, controlling for additional factors that might influence compliance behaviour. In February 2002 the treatment group received a letter signed by the commune?s fiscal commissioner containing normative appeals. Results indicate that moral suasion has hardly any effect on taxpayers? compliance behaviour. The strongest effect can be observed for the variable tax payments.

Suggested Citation

  • Benno Torgler, 2004. "Moral Suasion: An alternative tax policy strategy? Evidence from a controlled field experiment in Switzerland," CREMA Working Paper Series 2004-01, Center for Research in Economics, Management and the Arts (CREMA).
  • Handle: RePEc:cra:wpaper:2004-01
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    References listed on IDEAS

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    1. Jonathan S. Feinstein, 1991. "An Econometric Analysis of Income Tax Evasion and its Detection," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 14-35, Spring.
    2. Brian Erard & Chih-Chin Ho, 1999. "Searching for Ghosts: Who Are the Nonfilers nd How Much Tax Do They Owe?," Carleton Economic Papers 99-11, Carleton University, Department of Economics, revised Jul 2001.
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    7. Bosco, Luigi & Mittone, Luigi, 1997. "Tax Evasion and Moral Constraints: Some Experimental Evidence," Kyklos, Wiley Blackwell, vol. 50(3), pages 297-324.
    8. Slemrod, Joel & Blumenthal, Marsha & Christian, Charles, 2001. "Taxpayer response to an increased probability of audit: evidence from a controlled experiment in Minnesota," Journal of Public Economics, Elsevier, vol. 79(3), pages 455-483, March.
    9. Torgler, Benno, 2002. " Speaking to Theorists and Searching for Facts: Tax Morale and Tax Compliance in Experiments," Journal of Economic Surveys, Wiley Blackwell, vol. 16(5), pages 657-683, December.
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    11. Pyle, D J, 1991. " The Economics of Taxpayer Compliance," Journal of Economic Surveys, Wiley Blackwell, vol. 5(2), pages 163-198.
    12. Erard, Brian & Ho, Chih-Chin, 2001. "Searching for ghosts: who are the nonfilers and how much tax do they owe?," Journal of Public Economics, Elsevier, vol. 81(1), pages 25-50, July.
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    14. Benno Torgler & Christoph A. Schaltegger & Markus Schaffner, 2003. "Is Forgiveness Divine? A Cross-Culture Comparison of Tax Amnesties," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 375-396, September.
    15. Blumenthal, Marsha & Christian, Charles W. & Slemrod, Joel, 2001. "Do Normative Appeals Affect Tax Compliance? Evidence From a Controlled Experiment in Minnesota," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(1), pages 125-138, March.
    16. Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-373, August.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Nudge Database IV
      by Mark Egan in Economics, Psychology and Policy on 2013-04-14 21:17:00

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    Cited by:

    1. Loukas Balafoutas & Adrian Beck & Rudolf Kerschbamer & Matthias Sutter, 2014. "The Hidden Costs of Tax Evasion - Collaborative Tax Evasion in Markets for Expert Services," Working Papers 2014-01, Faculty of Economics and Statistics, University of Innsbruck.
    2. Andris Saulitis, 2016. "Is it all about money? Field experiment with the defaulted in a debt-collector enterprise," Natural Field Experiments 00567, The Field Experiments Website.
    3. Romaniuc Rustam, 2016. "What Makes Law to Change Behavior? An Experimental Study," Review of Law & Economics, De Gruyter, vol. 12(2), pages 447-475, July.
    4. Balafoutas, Loukas & Beck, Adrian & Kerschbamer, Rudolf & Sutter, Matthias, 2015. "The hidden costs of tax evasion," Journal of Public Economics, Elsevier, vol. 129(C), pages 14-25.
    5. Benno Torgler & Christoph A. Schaltegger, 2005. "Tax Morale and Fiscal Policy," CREMA Working Paper Series 2005-30, Center for Research in Economics, Management and the Arts (CREMA).
    6. Lars P. Feld & Bruno S. Frey, 2006. "Tax Evasion in Switzerland: The Roles of Deterrence and Tax Morale," IEW - Working Papers 284, Institute for Empirical Research in Economics - University of Zurich.
    7. Litina, Anastasia & Palivos, Theodore, 2016. "Corruption, tax evasion and social values," Journal of Economic Behavior & Organization, Elsevier, vol. 124(C), pages 164-177.
    8. Castro, Lucio & Scartascini, Carlos, 2015. "Tax compliance and enforcement in the pampas evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 65-82.
    9. repec:exl:22evid:v:2017:y:2017:i:1:p:- is not listed on IDEAS
    10. Lars P. Feld & Bruno S. Frey & Benno Torgler, 2006. "Rewarding Honest Taxpayers? Evidence on the Impact of Rewards from Field Experiments," CREMA Working Paper Series 2006-16, Center for Research in Economics, Management and the Arts (CREMA).
    11. Ross Adriana M. & McGee Robert W., 2011. "Attitudes toward Tax Evasion: A Demographic Study of Malaysia," Asian Journal of Law and Economics, De Gruyter, vol. 2(3), pages 1-51, October.
    12. Philipp Doerrenberg & Jan Schmitz, 2017. "Tax compliance and information provision. A field experiment with small firms," Journal of Behavioral Economics for Policy, Society for the Advancement of Behavioral Economics (SABE), vol. 1(1), pages 47-54, February.
    13. repec:kap:jbuset:v:148:y:2018:i:3:d:10.1007_s10551-016-3031-z is not listed on IDEAS
    14. Mascagni, Giulia, 2016. "From the Lab to the Field: a Review of Tax Experiments," Working Papers 8967, Institute of Development Studies, International Centre for Tax and Development.
    15. repec:eee:soceco:v:70:y:2017:i:c:p:10-22 is not listed on IDEAS
    16. Anastasia Litina & Theodore Palivos, 2015. "Corruption and Tax Evasion: Reflections on Greek Tragedy," Working Papers 193, Bank of Greece.
    17. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
    18. Joel Slemrod, 2010. "Old George Orwell Got It Backward: Some Thoughts on Behavioral Tax Economics," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 15-33, March.
    19. Donna Bobek & Amy Hageman & Charles Kelliher, 2013. "Analyzing the Role of Social Norms in Tax Compliance Behavior," Journal of Business Ethics, Springer, vol. 115(3), pages 451-468, July.
    20. Gangl, Katharina & Torgler, Benno & Kirchler, Erich & Hofmann, Eva, 2014. "Effects of supervision on tax compliance: Evidence from a field experiment in Austria," Economics Letters, Elsevier, vol. 123(3), pages 378-382.
    21. Biddle, Nicholas & Fels, Katja & Sinning, Mathias, 2017. "Behavioral insights and business taxation: Evidence from two randomized controlled trials," Ruhr Economic Papers 698, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    22. Boris Maciejovsky & Herbert Schwarzenberger & Erich Kirchler, 2012. "Rationality Versus Emotions: The Case of Tax Ethics and Compliance," Journal of Business Ethics, Springer, vol. 109(3), pages 339-350, September.
    23. Brown, Zachary, 2016. "Voluntary programs to encourage compliance with refuge regulations for pesticide resistance management: results from a quasi-experiment," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 237333, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    tax compliance; morale suasion; field experiment;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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