The Economic Psychology of Tax Behaviour

by Erich Kirchler , Foreword by Valerie Braithwaite

• ISBN13: 9780521757478
• ISBN10: 0521757479
• Format: Paperback
• Copyright: 2009-03-09
• Publisher: Cambridge University Press

Summary

Tax evasion is a complex phenomenon which is influenced not just by economic motives but by psychological factors as well. Economic-psychological research focuses on individual and social representations of taxation as well as decision-making. In this book, Erich Kirchler assembles research on tax compliance, with a focus on tax evasion, and integrates the findings into a model based on the interaction climate between tax authorities and taxpayers. The interaction climate is defined by citizens' trust in authorities and the power of authorities to control taxpayers effectively; depending on trust and power, either voluntary compliance, enforced compliance or no compliance are likely outcomes. Featuring chapters on the social representations of taxation, decision-making and self-employed income tax behaviour, this book will appeal to researchers in economic psychology, behavioural economics and public administration.

Author Biography

Erich Kirchler is a Professor in the Faculty of Psychology at the University of Vienna. His research interests include economic psychology, household financial decision-making and tax behaviour, and he has written several books in these areas.

Table of Contents

List of figures	p. vii
List of tables	p. ix
Foreword	p. xi
Preface	p. xiii
Introduction	p. 1
Tax law, the shadow economy and tax non-compliance	p. 5
Complexity of tax law	p. 5
Shadow economy	p. 13
Tax compliance versus non-compliance	p. 21
Definitions of tax compliance, avoidance and evasion	p. 21
Diffusion of income tax evasion	p. 23
Social representations of taxes	p. 28
Subjective knowledge and mental concepts	p. 31
Subjective knowledge	p. 31
Subjective concepts of taxation	p. 39
Attitudes	p. 49
Norms	p. 58
Personal norms	p. 59
Social norms	p. 64
Societal norms	p. 70
Behaviour control: perceived opportunities of non-compliance	p. 72
Fairness	p. 73
Distributive justice	p. 78
Procedural justice	p. 84
Retributive justice	p. 87
Individual and situational differences in justice concerns	p. 90
Justice and social identification	p. 93
Motivation to comply	p. 96
Motivational postures	p. 96
Tax morale	p. 99
Tax compliance decisions	p. 103
Audit probabilities, fines, tax rate and income effects	p. 107
Audit rates	p. 108
Fines	p. 111
Marginal tax rate	p. 114
Income	p. 115
Reasons for weak effects of audits and fines	p. 116
Repeated audits	p. 118
Heuristics, biases and framing effects	p. 129
Self-employment and taxpaying	p. 152
Interaction between tax authorities and taxpayers	p. 167
Cautious conclusions	p. 182
Methodological concerns	p. 182
Summary of research findings	p. 187
Interaction between tax authorities and taxpayers	p. 189
Social representations of taxes	p. 191
Deciding to pay taxes	p. 197
Self-employment and paying taxes out of pocket	p. 200
The 'slippery-slope model': trust in authorities and voluntary compliance versus power of authorities and enforced compliance	p. 202
References	p. 207
Index	p. 233
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