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Culture and Tax Structures

20 Pages Posted: 5 Mar 2012  

Tobias König

University of Hannover

Andreas Wagener

Leibniz Universität Hannover - Economics and Business Administration Area; CESifo (Center for Economic Studies and Ifo Institute for Economic Research); Vienna University of Economics and Business Administration

Date Written: February 29, 2012

Abstract

We argue that societies with a stronger tendency towards postmaterialist life goals tilt the tax structure towards personal income taxes and away from corporate taxation. We provide empirical evidence for this correlation in OECD countries. To address endogeneity issues we then use an epidemiological approach and employ the cultural values of second-generation immigrants to the US as an instrument for the degree of postmaterialism in their ancestral countries. Estimations with this approach re-confirm that personal taxes are higher, both in absolute and relative terms, in more postmaterialist countries.

Keywords: tax structure, taxation, social values, culture

JEL Classification: H110, H200, Z100

Suggested Citation

König, Tobias and Wagener, Andreas, Culture and Tax Structures (February 29, 2012). CESifo Working Paper Series No. 3748. Available at SSRN: https://ssrn.com/abstract=2016072

Tobias König (Contact Author)

University of Hannover ( email )

Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

Andreas Wagener

Leibniz Universität Hannover - Economics and Business Administration Area ( email )

Koenigsworther Platz 1
30167 Hannover
Germany

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Vienna University of Economics and Business Administration ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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