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Self-Concept Maintenance and Tax Evasion

Author

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  • Francesco Flaviano Russo

    () (Università di Napoli Federico II and CSEF)

Abstract

I analyze quasi-experimental data on tax evasion reports collected by the Italian webpage evasori.info. I find that a bigger number of reports per unit of irregular activity, which indicates a stronger tax morale, is negatively correlated with the median reported amount. I show that this evidence is consistent with a model of self-concept maintenance, where illegal actions are categorized more easily, in the sense that they are consistent with a positive self image of honesty, if they involve small amounts of money. The data suggest that a stronger individual and social attitude towards evasion makes this categorization more difficult, lowering the threshold below which evasion is acceptable. The result is tax evasion reports of smaller amount. I also propose a Montecarlo exercise to estimate this threshold and its dependence on tax morale.

Suggested Citation

  • Francesco Flaviano Russo, 2016. "Self-Concept Maintenance and Tax Evasion," CSEF Working Papers 441, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:441
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    References listed on IDEAS

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    More about this item

    Keywords

    Tax morale; Categorization; Attention to Standard.;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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