Political Alignment, Attitudes Toward Government and Tax Evasion

51 Pages Posted: 21 Feb 2018

See all articles by Julie Berry Cullen

Julie Berry Cullen

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Nick Turner

Board of Governors of the Federal Reserve System

Ebonya L. Washington

Yale University - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: February 2018

Abstract

We ask whether attitudes toward government play a causal role in the evasion of U.S. personal income taxes. We use individual-level survey data to demonstrate a link between sharing the party of the president and trust in the administration generally and opinions on taxation and spending policy, more specifically. Next, we move to the county level, and measure tax behavior as turnover elections push voters in partisan counties into and out of alignment with the party of the president. We provide three types of evidence that alignment reduces evasion. As a county moves into alignment we find 1) taxpayers report more easily-evaded forms of income; 2) suspect EITC claims decrease; and 3) audits triggered and audits found to owe additional tax decrease. Our results provide real-world evidence that a positive outlook on government lowers tax evasion.

Suggested Citation

Berry Cullen, Julianne (Julie) and Turner, Nick and Washington, Ebonya L., Political Alignment, Attitudes Toward Government and Tax Evasion (February 2018). NBER Working Paper No. w24323. Available at SSRN: https://ssrn.com/abstract=3127064

Julianne (Julie) Berry Cullen (Contact Author)

University of California, San Diego (UCSD) - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Nick Turner

Board of Governors of the Federal Reserve System ( email )

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Ebonya L. Washington

Yale University - Department of Economics ( email )

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New Haven, CT 06520-8264
United States

HOME PAGE: http://www.yale.edu/polisci/people/ewashington.html

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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