Procedural Fairness and Taxpayers�� Response Evidence from an Experimen

Byung-hill Jun, Myeonghwan Cho and Myung-Ho Park
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Byung-hill Jun: Hankuk University of Foreign Studes
Myung-Ho Park: Korea Institute of Public Finance

Korean Economic Review, 2015, vol. 31, 301-326

Abstract: We perform an experiment to investigate how the fairness of decision making procedures affects taxpayers�� income reporting behavior. According to our experiment, individuals tend to report more income, and thus evade less tax when majority voting determines a tax rate structure than when a dictatorship determines a tax rate structure. We also find that such a positive effect of majority voting occurs mainly through individuals dissatisfied with the current tax rate structure. These findings hint at a channel through which procedural fairness works to improve tax compliance.

Keywords: Tax Compliance; Experiment; Procedural Fairness; Voting (search for similar items in EconPapers)
JEL-codes: C91 D63 H26 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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