Fiscal Anarchy in the U.K.: Modelling Poll Tax Noncompliance

38 Pages Posted: 19 Sep 2007 Last revised: 17 Oct 2022

See all articles by Timothy J. Besley

Timothy J. Besley

London School of Economics & Political Science (LSE) - Department of Economics; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Ian Preston

University College London - Department of Economics

Michael Ridge

affiliation not provided to SSRN

Date Written: October 1993

Abstract

The U.K.'s experience with the poll tax reminds us that even in an economy with a relatively well developed detection and legal system, one cannot take tax compliance for granted. The experience of the poll tax provides a unique opportunity to study many dimensions of tax compliance. We model nonpayment rates in a short panel of data on the 366 English local authorities. The transparent observability of individual and aggregate liabilities makes reliable measurement of rates of nonpayment possible. Moreover, these rates rose to unprecedented levels as well as exhibiting considerable variation across authorities. This, together with the variation in local taxes both between districts and over time, creates an ideal opportunity for empirical investigation. Our empirical specification allows us to investigate the determinants of compliance as a function of authority characteristics from census and other geographical data. Moreover, the analysis takes seriously the possibility of neighbourhood influences across authority boundaries. Our empirical results confirm the idea that higher taxes lead to larger compliance problems and that attempts to enforce compliance have a positive effect. Neighbourhood effects on non-compliance were less conspicuous, figuring significantly, if at all, only in the final year.

Suggested Citation

Besley, Timothy J. and Preston, Ian and Ridge, Michael, Fiscal Anarchy in the U.K.: Modelling Poll Tax Noncompliance (October 1993). NBER Working Paper No. w4498, Available at SSRN: https://ssrn.com/abstract=480261

Timothy J. Besley (Contact Author)

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Centre for Economic Policy Research (CEPR)

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Ian Preston

University College London - Department of Economics ( email )

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United Kingdom
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+44 20 7916 2713 (Fax)

Michael Ridge

affiliation not provided to SSRN

No Address Available

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