 Paying Taxes Like Uli Hoeneß — Tax Evasion, Charitable Giving, and Political CongruenceGrüner, Hans Peter and Sebastian Siegloch No 21980, CEPR Discussion Papers from Centre for Economic Policy Research Abstract: We study the joint determination of tax evasion and charitable giving. A simple model in which individuals derive a warm glow from contributing to socially valuable activities predicts that congruence with the government determines whether tax payments substitute for private donations: under congruence, taxes and donations are warm-glow substitutes and donating-while-evading is dominated; under incongruence, donations retain their warm glow value while taxes do not, opening a region in the preference space in which evasion and donation are jointly optimal. We test the prediction using the seventh wave of the World Values Survey. Consistent with the theory, individuals with low levels of obedience and high prosocial motives are most likely to be observed in the donate-and-evade cell, and this concentration is stronger when individuals are not aligned with their national government — raising their odds of donating while evading by roughly one-quarter. Our results point to political congruence as a margin of tax compliance largely absent from the standard tax-compliance-and-morale literature, yet with implications for institutional design. JEL-codes: D64 D72 D91 H26 H41 (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21980 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.