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Tax Morale and Compliance Behavior: First Evidence on a Causal Link

  • Martin Halla

Recent literature on tax evasion emphasizes the importance of moral considerations to explain compliance behavior. As a consequence scholars aim to identify factors that shape this so-called tax morale. However, the causal link between tax morale and actual compliance behavior is not established yet. Exploiting exogenous variation in tax morale - given by the inherited part of tax morale of American-born from their ancestors country of origin - our instrumental variable analysis provides first evidence on a causal effect of tax morale on the size of the underground production.

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File URL: http://www.econ.jku.at/papers/2010/wp1006.pdf
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Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2010-06.

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Length: 22 pages
Date of creation: Apr 2010
Date of revision:
Handle: RePEc:jku:econwp:2010_06
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