Inequality shapes the propagation of unethical behaviours: Cheating responses to tax evasion along the income distribution

Andrea Martinangeli and Lisa Windsteiger

Journal of Economic Behavior & Organization, 2024, vol. 220, issue C, 135-181

Abstract: Does the dissemination of salient information about tax dishonesty, such as high profile tax evasion or avoidance, facilitate the propagation of unethical behaviours, and in what way? We investigate this question in a large scale survey experiment on more than 4000 Italians. We find that how information about greater tax evasion affects dishonesty and perceived tax compliance norms depends on the income of the evaders: Evasion at the bottom of the income distribution weakens the norm among low-income earners, while evasion at the top increases dishonesty among high-income earners. We also uncover negative effects on social trust and on attitudes towards wealth and wealth accumulation, showcasing the detrimental effect of unethical tax practices on social and economic relations.

Keywords: Tax evasion; Tax avoidance; Inequality; Conditional cooperation; Cheating; Survey experiment (search for similar items in EconPapers)
JEL-codes: D01 D31 D63 H23 H26 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:220:y:2024:i:c:p:135-181

DOI: 10.1016/j.jebo.2024.02.012

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