Tax Morale and Optimal Taxation

Werner Güth () and Rupert Sausgruber

No CESifo Working Paper No. 1284, CESifo Working Paper Series from CESifo Group Munich

Abstract: We study experimentally how taxpayers choose between two tax regimes to fund a public good. The first-best tax regime imposes a general, distortion-free income tax. However, this tax cannot be enforced. The second-best alternative supplements the income tax by a specific commodity tax. This tax cannot be evaded but distorts optimal consumption choices, instead. The result is that a large majority of subjects prefer the general income tax regime. The bulk of votes is consistent with actual payoffs. We isolate tax morale as cause for payoffs above theoretical predictions.

Keywords: optimal taxation; tax evasion; voting; experiments (search for similar items in EconPapers)
JEL-codes: C91 H21 H26 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp, nep-pbe and nep-pub
Date: 2004
View list of references View citations in EconPapers

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo1_wp1284.pdf (application/pdf)

Related works:
Working Paper: Tax Morale and Optimal Taxation (2004)
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: http://EconPapers.repec.org/RePEc:ces:ceswps:_1284

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().