Tax Morale and Fairness in Conflict - An Experiment

35 Pages Posted: 22 Feb 2019

See all articles by Christoph Engel

Christoph Engel

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Bonn - Faculty of Law & Economics; Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students; Universität Osnabrück - Faculty of Law

Luigi Mittone

University of Trento - Department of Economics and Management

Azzurra Morreale

Lappeenranta University of Technology (LUT)

Date Written: February 1, 2019

Abstract

Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced. Yet voluntary compliance is reduced if participants learn that income is heterogeneous. The effect is driven by participants with the lowest income. The reduction obtains irrespective of the tax regime. If the tax is proportional to income, or progressive, participants become more skeptical about the willingness of participants with high income to comply.

Keywords: tax evasion, tax morale, heterogeneity, income inequality, lump sum tax, proportional tax, progressive tax, beliefs, path model

JEL Classification: C30, C91, D01, D02, D31, D63, D91, H26, K34, K42

Suggested Citation

Engel, Christoph and Mittone, Luigi and Morreale, Azzurra, Tax Morale and Fairness in Conflict - An Experiment (February 1, 2019). MPI Collective Goods Discussion Paper, No. 2019/2, Available at SSRN: https://ssrn.com/abstract=3339295 or http://dx.doi.org/10.2139/ssrn.3339295

Christoph Engel (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany
+049 228 914160 (Phone)
+049 228 9141655 (Fax)

HOME PAGE: http://www.coll.mpg.de/engel.html

University of Bonn - Faculty of Law & Economics

Postfach 2220
D-53012 Bonn
Germany

Erasmus University Rotterdam (EUR), Erasmus School of Law, Rotterdam Institute of Law and Economics, Students ( email )

Burgemeester Oudlaan 50
PO Box 1738
Rotterdam
Netherlands

Universität Osnabrück - Faculty of Law

Osnabruck, D-49069
Germany

Luigi Mittone

University of Trento - Department of Economics and Management ( email )

Via Inama 5
Trento, I-38100
Italy

Azzurra Morreale

Lappeenranta University of Technology (LUT) ( email )

Lappeenranta
Finland

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
63
Abstract Views
1,199
rank
389,332
PlumX Metrics