Taking the high road? Compliance with commuter tax allowances and the role of evasion spillovers

Paetzold, Jörg; Winner, Hannes

doi:10.1016/j.jpubeco.2016.08.001

Cited by 39 publications

(36 citation statements)

References 26 publications

(22 reference statements)

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“…In the more general tax compliance literature, the evidence, albeit scant, shows that taxpayers use the information they gain about their colleagues or neighbors to update their beliefs, which affects their behavior, as we argue in this paper. For example, Paetzold and Winner (2014) shows that an individual's evasion decision is influenced by the compliance behavior of other coworkers, with job changers from low-to high-cheating companies starting to evade much more after they move. As information is transmitted, it increases their knowledge about the possibilities of non-compliance.…”

Section: Discussion Robustness Checks and Placebo Analysismentioning

confidence: 99%

Do Rewards Work?: Evidence from the Randomization of Public Works

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Terms of use: Documents inFollowing a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2017 Abstract * This paper evaluates the effect of positive inducements on tax behavior by exploiting a natural experiment in which a municipality of Argentina randomly selected 400 individuals among more than 72,000 taxpayers who had complied with payment of their property tax. These individuals were publicly recognized and awarded the construction of a sidewalk. Results indicate that: i) being selected in the lottery and publicly recognized by the government has a positive but not persistent effect on future compliance; ii) receiving the sidewalk has a large positive and persistent effect; iii) high and persistent spillover effects exist: some neighbors of those who receive the reward comply more too, and these effects can be even larger than the direct effects; and iv) there is no financial motive effect; i.e., people do not pay their taxes just to participate in the lottery. Recognition serves only as a short-term incentive, but the provision of a durable and visible good has more persistent and broader effects. These findings provide evidence on features that make a positive ind...

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Section: Discussion Robustness Checks and Placebo Analysismentioning

confidence: 99%

Do Rewards Work?: Evidence from the Randomization of Public Works

2017

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“…By contrast, evidence of complementary evasion spillovers regarding opportunities to cheat is extremely scarce. Paetzold and Winner (2016) show in the context of the Austrian commuter tax allowance that job changers moving to companies with a higher proportion of cheaters increase their cheating. Beyond that, we are only aware of related evidence from laboratory experiments, showing that taxpayers' reporting is sensitive to the evasion decision taken by other taxpayers (Fortin et al, 2007;Alm et al, 2009).…”

Section: Introductionmentioning

confidence: 94%

“…We tackle this problem by exploring a specific setting in which we can observe tax compliance behavior for two generations at the individual level. This is possible in the case of the commuter tax allowance in Austria, the largest standard deduction available for Austrian wage earners (Paetzold and Winner, 2016). This commuter allowance is designed as a step function of the distance between the residence and the workplace, creating sharp discontinuities at each bracket threshold.…”

Section: Introductionmentioning

confidence: 99%

The Intergenerational Causal Effect of Tax Evasion: Evidence from the Commuter Tax Allowance in Austria

Frimmel

Halla

Paetzold

2018

Journal of the European Economic Association

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Does tax evasion run in the family? To answer this question, we study the case of the commuter tax allowance in Austria. This allowance is designed as a step function of the distance between the residence and the workplace, creating sharp discontinuities at each bracket threshold. The distance to these brackets is a strong determinant of compliance since it corresponds to the probability of detection. The match of different administrative data sources allows us to observe actual compliance behavior at the individual level across two generations. To identify the intergenerational causal effect in tax evasion behavior, we use the paternal distance-to-bracket as an instrumental variable for paternal compliance. We find that paternal noncompliance increases children's non-compliance by about 20 percent.JEL Classification: H26, A13, H24, J62, D14.

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“…20 Pätzold and Winner (2014) further argue, that the control of the exactness is costly for employers as e.g. online route planners have not been available throughout their period of study.…”

Section: Descriptivesmentioning

confidence: 99%

“…Using matched data from the universe of Austrian taxpayers and a matched employer-employee data set, Pätzold and Winner (2014) Table 1 shows that the average crow-fly commuting distance is about 23km.…”

mentioning

confidence: 99%