Political Alignment, Attitudes Toward Government and Tax Evasion

75 Pages Posted: 20 Apr 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)

Nicholas Turner

Independent

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 21, 2018

Abstract

We ask whether attitudes toward government play a causal role in the evasion of U.S. personal income taxes. We first 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 elections, decided by the voting behavior in swing-states, push voters in partisan counties into and out of alignment with the party of the president. Using IRS data, we find that reported taxable income increases as a county moves into alignment, with the increases concentrated in income sources that are easily evaded, due to lack of third-party reporting. Corroborating the view that evasion falls, potentially suspect EITC claims and audit rates also fall. Our results provide real-world evidence that a positive outlook on government lowers tax evasion.

Keywords: tax evasion, tax morale

JEL Classification: D720, H240, H260, H300

Suggested Citation

Berry Cullen, Julianne (Julie) and Turner, Nicholas and Washington, Ebonya L., Political Alignment, Attitudes Toward Government and Tax Evasion (February 21, 2018). CESifo Working Paper Series No. 6905, Available at SSRN: https://ssrn.com/abstract=3165315

Julianne (Julie) Berry Cullen (Contact Author)

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

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nicholas Turner

Independent

Ebonya L. Washington

Yale University - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8264
United States

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

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
406
PlumX Metrics