WHY DO PEOPLE EVADE TAXES? Summaries of 90 Surveys

Abstract

Various World Values Surveys have solicited the views on tens of thousands of people regarding their views on the ethics of tax evasion. Numerous studies citing these surveys have been published. However, those surveys only gathered information about their attitudes toward justifying tax evasion. The surveys did not ask participants the reasons for their answers, leaving readers to guess what their reasons might be. The present study aims to partially fill that gap in the tax evasion literature. This paper summarizes the results of 90 surveys that solicited the opinions of many people in different countries on their views of the justifiability of tax evasion. The survey instrument consisted of (usually) 18 statements that began with the phrase, “Tax evasion is ethical if …”. Participants were asked to select a number from 1 to 7 to indicate the extent of their agreement with each statement, where 1 = strongly agree and 7 = strongly disagree. The results of these studies have policy implications. If the goal is to reduce the extent of tax evasion, it is necessary to address the root causes of tax evasion. If people evade taxes because the government engages in human rights abuses, governments must make an effort to reduce (or preferably eliminate) human rights abuses. If people evade taxes because tax rates are too high, efforts must be made to reduce tax rates. If people evade taxes because of the perception that they are not receiving much in benefits from their tax payments, governments need to increase the benefit-to-cost ratio. If people evade taxes because they view their government as corrupt or inefficient, governments must make an attempt to become more efficient and less corrupt.

Keywords: ethics, tax evasion, tax morale, survey

JEL Classification: E26, H26, O17