Tax Policy and the News: An Empirical Analysis of Taxpayers’ Perceptions of Taxrelated Media Coverage and its Impact on Tax Compliance

22 Pages Posted: 2 Dec 2013

See all articles by Matthias Kasper

Matthias Kasper

University of Vienna

Christoph Kogler

University of Vienna - Department of Psychology

Erich Kirchler

University of Vienna - Faculty of Psychology

Date Written: November 2013

Abstract

The present study addresses the question of how taxpayers’ perceptions of government and tax authorities are influenced by media coverage. The effect that national political topics, such as tax legislation and the expenditure of tax revenues, have on the tax payer is examined. Tax compliance depends on trust in authorities, i.e., a commonly shared belief that politicians and tax authorities act in order to promote social welfare, and the perceived power of authorities, i.e., taxpayers’ perceptions of tax authorities’ ability to detect and pursue tax crime. We investigate the influence of specific tax related information in the news on intended tax compliance. Results from a questionnaire-based experiment with 487 employees indicate that media coverage influences the indicated trust in tax authorities, as well as the perceived power of governmental institutions, and consequently, has an impact on participants’ intended tax compliance. The findings suggest that governments should actively engage in the provision of relevant information on tax matters. This would increase both trust in the state and the authorities as well as awareness of their power regarding the enforcement of tax laws, effectively acting as a means to regulate taxpayers’ behavior.

Keywords: Tax Compliance, Trust, Power, Slippery Slope Framework, Tax Policy, Media Coverage

JEL Classification: H26

Suggested Citation

Kasper, Matthias and Kogler, Christoph and Kirchler, Erich, Tax Policy and the News: An Empirical Analysis of Taxpayers’ Perceptions of Taxrelated Media Coverage and its Impact on Tax Compliance (November 2013). WU International Taxation Research Paper Series No. 2013 - 07. Available at SSRN: https://ssrn.com/abstract=2357976 or http://dx.doi.org/10.2139/ssrn.2357976

Matthias Kasper (Contact Author)

University of Vienna

Universitätsstraße 7
Vienna, Vienna 1010
Austria

Christoph Kogler

University of Vienna - Department of Psychology ( email )

Universitaetsstraße 7
Vienna, 1010
Austria

Erich Kirchler

University of Vienna - Faculty of Psychology ( email )

Universitaetsstrasse 7
Vienna, A-1010
Austria
+43 1 42 7747332 (Phone)
+43 1 42 7747339 (Fax)

HOME PAGE: http://homepage.univie.ac.at/erich.kirchler

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