Tax Morale and the Legitimacy of Economic Policy
27 Pages Posted: 8 Jul 2005
Date Written: February 2005
Abstract
It is proposed that a more accurate prediction of tax evasion activity than in the standard portfolio-choice model can be derived even for risk-neutral individuals if psychological costs are considered. Contrary to earlier models integrating psychological costs they are systematically derived by assuming a relationship between psychological costs, taxpayer satisfaction with public policy and taxes evaded. A formal concept of legitimacy of public policies is introduced and it is shown that legitimacy influences evasion activity.
Keywords: Tax evasion, tax morale, economics and psychology, political legitimacy
JEL Classification: H26, Z13
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Motivation Crowding Theory: A Survey of Empirical Evidence
By Bruno S. Frey and Reto Jegen
-
Motivation, Knowledge Transfer, and Organizational Forms
By Margit Osterloh and Bruno S. Frey
-
Trust Breeds Trust: How Taxpayers are Treated
By Lars P. Feld and Bruno S. Frey