Fining Tax Evasion: Is Adjusting Fines to Level of Income Fairer Than Basing Fines Solely on the Evaded Amount?

Stephan Muehlbacher and Thomas Sabitzer

FinanzArchiv: Public Finance Analysis, 2022, vol. 78, issue 3, 291-311

Abstract: Fines for tax evasion are usually based on the amount evaded. The present research shows that laypeople (N = 191) prefer income-adjusted fines in opinion polls, but in the role of a judge they would sometimes act differently. In a factorial survey experiment simulating the negotiation of a court case about tax evasion, fines were adjusted only to the defendant's income when details about the amount of evasion and the evader's income but not about the true tax liability were provided. When participants were informed also about the defendant's full tax liability, they imposed similar fines to high- and low-income earners.

Keywords: income-adjusted fines; day fines; tax evasion; tax compliance; retributive fairness; survey experiments; income-adjustedfines; dayfines; taxevasion; taxcompliance; retributivefairness; surveyexperiments (search for similar items in EconPapers)
JEL-codes: B41 C83 H26 K34 K42 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1628/fa-2022-0011

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