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Taxation and Conditional Taxation

Author

Listed:
  • Bruno S. Frey

    () (Institute for Empirical Economic Research of the University of Zurich)

  • Benno Torgler

    () (Yale Center for International and Area Studies)

Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. Concepts of Homo Economicus, endowed with a more refined motivation structure, help to shed light on the tax compliance puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 European countries. The findings suggest that a higher perceived tax evasion leads to a lower tax morale, also when controlling for additional factors in a multivariate analysis.

Suggested Citation

  • Bruno S. Frey & Benno Torgler, 2004. "Taxation and Conditional Taxation," Working Papers 2004/7, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:154806art152
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    More about this item

    Keywords

    Pro-social behavior; Tax compliance; Tax evation; Tax morale;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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