To Punish or Not to Punish? The Impact of Tax Fraud Punishment on Observers’ Tax Compliance
Jonathan Farrar () and
Tisha King ()
Additional contact information
Jonathan Farrar: Wilfrid Laurier University
Tisha King: Dalhousie University
Journal of Business Ethics, 2023, vol. 183, issue 1, No 14, 289-311
Abstract:
Abstract This article synthesizes insights from deterrence theory and social psychology literature on retributive justice to develop and test a theoretical model which predicts how and why observers’ tax compliance intentions are influenced by knowledge of the punitive outcomes faced by individuals found guilty of tax fraud. We test our model experimentally on a sample of Canadian taxpayers and manipulate perceived responsibility for a fraud and whether a fraud perpetrator is punished. We show that observers’ tax compliance increases when a fraud perpetrator is punished only when the perpetrator is perceived as blameworthy. The psychological process through which this positive influence operates is relatively complex, as it includes perceptions of punishment deservingness and affect. We also find that tax compliance decreases when a tax fraud perpetrator is unpunished, regardless of perceived blameworthiness. Our results are robust when we control for economic determinants known to influence fraud. The article concludes by discussing our findings’ implications for fraud research and policy.
Keywords: Fraud; Retributive justice; Punishment reactions; Punishment deservingness; Responsibility; Affective reactions; Tax compliance (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://link.springer.com/10.1007/s10551-022-05061-w Abstract (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:kap:jbuset:v:183:y:2023:i:1:d:10.1007_s10551-022-05061-w
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2
DOI: 10.1007/s10551-022-05061-w
Access Statistics for this article
Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman
More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().