Structural Equation Modelling for Premium and Tax Perception of Retired and Employees: Istanbul Example

Abstract

Tax perception is defined as a concept that affects tax consciousness and the attitudes of the individuals regarding the tax. In this context, many studies are available in the public finance literature. On the other hand, due to the similarity with taxes, there are few studies on how the social security premium can reveal a relationship with the tax perception. It is essential how these perceptions can generate results in terms of retirees and employees. This situation constitutes the motivation for the study. The study aims to reveal the differences in the tax and premium perceptions regarding young employees in the age range of 18-35 and retirees. In order to determine this difference, test results within the scope of structural equation modeling were considered. The use of the tests regarding structural equation models that provide more reliable results than parametric or nonparametric tests contributes to the public finance literature. According to the results of this study, the effect level concerning employees' perceptions of premiums on their tax perceptions may be higher than that of retirees.