Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality

Zsombor Z. Méder (), Andras Simonovits () and János Vinczeb
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Zsombor Z. Méder: Maastricht University, Department of Economics
János Vinczeb: Central European University, Department of Economics

Economic Analysis and Policy, 2012, vol. 42, issue 2, 171-188

Abstract: We study a family of models of tax evasion, where a flat-rate tax finances only the provision of public goods, neglecting audits and wage differences. We focus on the comparison of two modeling approaches. The first is based on optimizing agents, who are endowed with social preferences, their utility being the sum of private consumption and moral utility. The second approach involves agents acting according to simple heuristics. We find that while we encounter the traditionally shaped Laffer-curve in the optimizing model, the heuristics models exhibit (linearly) increasing Laffercurves.

Keywords: Tax evasion; Tax morale; Agent-based simulation (search for similar items in EconPapers)
JEL-codes: H26 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (17)

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Working Paper: Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:42:y:2012:i:2:p:171-188

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