Tax Morale and Conditional Cooperation

Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. A homo economicus, with a more refined motivation structure, helps us to shed light on this puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 West and East European countries. We find a high correlation between perceived tax evasion and tax morale. The results remain robust after exploiting endogeneity and conducting several robustness tests. We also observe a strong positive correlation between institutional quality and tax morale.

Exchanges Create Relations

“…If taxation is considered a social action, the behaviour of individual taxpayers will be strongly influenced by that of others (Frey and Torgler 2007). Frey and Torgler maintain that there is a strong correlation between conditional cooperation of the individual and the extent of tax morale or of tax evasion.…”

“…Sahlins 1972), whereas positive reciprocity enforces a common expectation of a positive contribution in return (for something given) regardless if it is in the form of a gift, a service, a compliment or a loan. Finally, the vertical variety of reciprocity illustrates the relationship between the public sector and taxpayers (Alm et al 1993;Frey and Torgler 2007;Bazart and Bonein 2014) and the horizontal variety is the relationship between taxpayers themselves. These relationships have been studied as separate entities in studies of unfairness in taxation, yet as they are both potential sources of unfairness they ought to be studied in tandem (Schnellenbach 2010;Bazart and Bonein 2014).…”

Kepatuhan Pajak Dalam Perspektif Neo Ashabiyah

“…Torgler (2007) mendefinisi moralitas pajak sebagai motivasi intrinsik untuk membayar pajak. Kemauan membayar pajak merupakan bagian dari kewajiban moral dan keyakinan bahwa pajak berkontribusi bagi masyarakat.…”

“…Tidak ada yang suka membayar pajak (Frey dan Torgler, 2007) tidak peduli status sosial, gender, agama, dan bangsa. Tanpa peduli apakah ia ateis atau sekuler atau yang religius sekalipun.…”

Why do farmers behave as they do? Understanding compliance with rural, agricultural, and food attribute standards

“…For instance, empirical evidence of higher tax compliance in environments with better institutional quality is given by Frey and Torgler (2007). There is a significant difference in tax morale between Western and Eastern Europe that authors relate to the disruption in the institutional framework.…”