Tax Return as a Political Statement

60 Pages Posted: 1 Jun 2011 Last revised: 25 Sep 2013

See all articles by Alexander Libman

Alexander Libman

Free University of Berlin (FUB)

André Schultz

Frankfurt School of Finance & Management

Thomas Graeber

Frankfurt School of Finance & Management

Date Written: January 2013

Abstract

The accuracy of a tax return is usually interpreted as an outcome of the tax evasion decision by an individual. However, in non-democratic regimes with predatory blackmail tax systems it is possible that large sums voluntarily reported by influential politicians or businessmen may be used as political signals. In this paper we explore the idea of a tax return as a political statement and test it using a unique dataset of the tax returns filed by the Russian regional governors and the members of their families for the year 2009. Our results conjecture that Russian governors may deliberately file their tax return as a political statement to signal their strength, making them more costly to fire for the federal center.

Keywords: tax compliance, communication in non-democracies, Russian regions

JEL Classification: D73, D78, H26, P26

Suggested Citation

Libman, Alexander and Schultz, André and Graeber, Thomas, Tax Return as a Political Statement (January 2013). Available at SSRN: https://ssrn.com/abstract=1855540 or http://dx.doi.org/10.2139/ssrn.1855540

Alexander Libman (Contact Author)

Free University of Berlin (FUB) ( email )

Van't-Hoff-Str. 8
Berlin, Berlin 14195
Germany

André Schultz

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Thomas Graeber

Frankfurt School of Finance & Management ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

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