A Psychometric Investigation of the Personality Traits Underlying Individual Tax Morale

Abstract

Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called “tax morale”, has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-offs. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g. affective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g. ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we find statistically significant correlations of tax compliance behavior with empathy and shame, the economic significance of these correlations are low–—more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion.

Who’ll stop lying under oath? Empirical evidence from tax evasion games

“…Let us denote r i = y i − y i y i the evasion rate, and τ the tax rate. Without auditing, all subjects choose to fully evade unless their preferences feature some moral component (induced by, e.g., tax morale Luttmer and Singhal, 2014;Jacquemet, Luchini, Malézieux, and Shogren, 2019, or a cost of lying Gneezy, 2005; see Gneezy, Kajackaite, and Sobel, 2017 for a detailed discussion of the sources of lying costs in single decision-making situations). Accordingly, we consider the following utility model:…”

Understanding tax payment behaviour in the West African Economic and Monetary Union: The role of perceived detection capacity and honesty

“…This result supports the tax morale hypothesis. Numerous empirical studies have also supported the moral tax theory (Alm & Torgler, 2006;Jacquemet et al, 2017Jacquemet et al, , 2019Lago-Peñas & Lago-Peñas, 2010;Scholz & Lubell, 1998;Torgler & Schneider, 2007.…”

“…Tax morale captures the behavioural idea that non‐monetary preferences (like norm‐submission, moral emotions and moral judgements) might be better determinants of tax compliance than monetary trade‐offs (Jacquemet et al, 2019). The ‘tax morale’ theory includes all intrinsic motivations, such as morality or the willingness to contribute to the financing of public goods, and social motivations, such as peer effects or cultural norms (Luttmer & Singhal, 2014).…”

“…There is also a large body of research investigating intrinsic motivations for tax compliance. However, most studies occurred in developed countries (Alm & Torgler, 2006; Jacquemet et al, 2017, 2019; Lago‐Peñas & Lago‐Peñas, 2010; Scholz & Lubell, 1998; Torgler & Schneider, 2007, 2009). Scholz and Lubell (1998) find that trust in government and trust in citizens significantly increase the likelihood of tax compliance in the United States.…”

Податкова Мораль В Україні Як Дестимулятор Податкової Культури

“…Як свідчать численні закордонні дослідження [3][4][5][6], фіскальна соціологія висвітлює широке коло факторів, що можуть впливати на загальний рівень виконання податкового обов'язку у країні. Зокрема відзначається наявний зв'язок між рівнем податкової моралі та рівнем ухилення від сплати податків.…”