Tax payments are enhanced by taxpayers' trust in authorities or by authorities' power leading to voluntary or enforced tax compliance, respectively. A laboratory experiment and an online experiment examined these assumptions, manipulating trust in and power of authorities. In Experiment 1, participants paid taxes in twenty periods. Results showed that trust and power positively influence tax payments. Trust increases and power decreases voluntary compliance, whereas power increases and trust decreases enforced compliance. Experiment 2 analyzed the impact of trust and power with self-employed taxpayers' intentions to pay taxes. The overall pattern of the findings of Experiment 1 were replicated and expanded with strategic behavior; strategic behavior was higher in the case of low trust and high power when compared to that of high trust and high power.l apo_327 383..406

No abstract

No abstract

No abstract

The current experimental study examined the effect of monetary rewards on tax compliance. Eighty-six participants were randomly assigned to one control and two reward conditions (low vs. high reward). Overall, tax compliance was not affected by the rewards. However, a change in compliance strategies was observed. It seems that rewards provoked an all-or-nothing behavior. Whereas in the reward conditions, participants were either completely honest or evaded all of their income, in the control condition, the amount of evasion varied more strongly. Furthermore, audited compliant taxpayers who are rewarded evaded less in the following period compared with audited compliant taxpayers who experienced no rewards.