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Illegal, Immoral, Fattening or What?: How Deterrence and Responsive Regulation Shape Tax Morale

  • Lars P. Feld

    ()

    (Faculty of Business Administration and Economics, Philipps Universitaet Marburg)

  • Bruno S. Frey

    (University of Zürich)

The traditional economic approach to tax evasion does not appear to be particularly successful in explaining the extent of tax compliance. It is often argued that reciprocity norms which establish a fiscal exchange between the state and the citizens shape tax morale to a large extent. In that respect, a case study of Switzerland may be useful because the small size of the cantons and their direct democratic political systems procedurally establish a close exchange relationship between taxpayers and tax authorities. In this paper, evidence is discussed on how tax morale in Switzerland evolved over time. In addition, the impact of economic, legal, socio- demographic, psychological and institutional factors on Swiss tax evasion is analyzed. It can be concluded that Switzerland’s system of responsive regulation increases tax morale.

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File URL: http://www.uni-marburg.de/fb02/makro/forschung/gelbereihe/artikel/2004-26-IllegalDP_gesamt.pdf
File Function: First version, 2004
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Paper provided by Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung) in its series Marburg Working Papers on Economics with number 200426.

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Length: 27 pages
Date of creation: 2004
Date of revision:
Publication status: Forthcoming in Friedrich Schneider and Chris Bajada (eds.), Size, Cause and Consequences of the Underground Economy, 2004.
Handle: RePEc:mar:volksw:200426
Contact details of provider: Postal: Universitätsstraße 25, 35037 Marburg
Phone: 06421/28-1722
Fax: 06421/28-4858
Web page: http://www.uni-marburg.de/fb02/Email:


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