Religiosity and Tax Compliance: Evidence from U.S. Counties

Sanghyun Hwang and Kadir Nagac

Applied Economics, 2021, vol. 53, issue 47, 5477-5489

Abstract: The intention of this paper is to analyse religiosity as a factor that potentially affects tax compliance. Studies in the 1990s have shown that the puzzle of tax compliance is ‘why so many individuals pay their taxes’ and not ‘why people evade taxes.’ It has been noted that compliance cannot be entirely explained by the level of enforcement. Countries set the levels of audit and penalty so low that most individuals would evade taxes if they were rational, because it is unlikely that cheaters will be caught and penalized. Nevertheless, a high degree of compliance is observed. Therefore, studies that analyse a variety of factors other than detection and punishment are need. Religiosity can play an important role in determining one’s tax compliance decision. We use religious adherence data from the American Religious Data Archive and measure tax compliance as a discrepancy in reported income between Internal Revenue Service and Census data to analyse independent effects of church adherence rates on tax compliance in the United States at the county level. To our knowledge, this paper is the first study that analyzes the effect of religiosity on actual tax compliance behaviour.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1923638 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:applec:v:53:y:2021:i:47:p:5477-5489

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1923638

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().