Mental Accounting of Self-Employed Taxpayers: On the Mental Segregation of the Net Income and the Tax Due

Stephan Muehlbacher and Erich Kirchler

FinanzArchiv: Public Finance Analysis, 2013, vol. 69, issue 4, 412-438

Abstract: Mental accounting practices of self-employed taxpayers are investigated in two studies. Interviews (N=30) revealed that perceptions of the tax due differ widely. While a majority mentally segregate the tax component from their net income, others claim ownership of the gross income as a whole and consequently experience a loss when paying taxes. A survey (N=172) shows that mental segregation is associated with age, income, and number of employees, and is further related to attitudes towards taxes and to self-reported compliance. It is concluded that especially inexperienced self-employed should be trained in favorable mental tax accounting practices to foster voluntary compliance.

Keywords: mental accounting; segregation; tax compliance; tax evasion; voluntary compliance (search for similar items in EconPapers)
JEL-codes: D81 H24 H26 M13 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/mental-acco ... 1628001522113x675656 (text/html)
Fulltext access is included for subscribers to the printed version.

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:mhr:finarc:urn:sici:0015-2218(201312)69:4_412:maosto_2.0.tx_2-l

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

DOI: 10.1628/001522108X675656

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().