Social Norms and Conditional Cooperative Taxpayers

Christian Traxler

Discussion Papers in Economics from University of Munich, Department of Economics

Abstract: This paper incorporates tax morale into the Allingham Sandmo (1972) model of income tax evasion. Tax morale is interpreted as a social norm for tax compliance. The norm strength, depending on the share of evaders in the society, is endogenously derived. Taxpayers act conditionally cooperative, as their evasion decision depends on the other agents' compliance. We characterize an equilibrium which accounts for this interdependence and study the impact of tax and deterrence policies on compliance. Our analysis is then extended to the case of a society which consists of heterogenous communities where individual evasion decisions are embedded in a complex social structure. In this scenario, behavior is crucially influenced by the norm compliance among morale reference groups. Within this framework, we discuss the role of belief management and belief leadership as alternative policy tools.

Keywords: Tax Evasion; Tax Morale; Social Norms; Conditional Cooperation (search for similar items in EconPapers)
JEL-codes: H26 K42 Z13 (search for similar items in EconPapers)
Date: 2006-09
New Economics Papers: this item is included in nep-cbe, nep-net, nep-pbe and nep-soc
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://epub.ub.uni-muenchen.de/1202/1/Traxler_NormsEvasion.pdf (application/pdf)

Related works:
Journal Article: Social norms and conditional cooperative taxpayers (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenec:1202

Access Statistics for this paper

More papers in Discussion Papers in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().