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How Can Culture Affect Taxation? A Postmaterialism Value Approach

Nicolae-Bogdan Ianc () and Thierry Baudassé ()
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Nicolae-Bogdan Ianc: University of Orléans
Thierry Baudassé: University of Orléans

Comparative Economic Studies, 2021, vol. 63, issue 3, No 8, 466-488

Abstract: Abstract Direct tax revenues vary significantly, in the percentage of GDP, in selected countries. This difference is coming for various reasons. Our aim in this paper is to emphasize that there is a vital argumentation which is put forward to explain these variations, called cultural diversity. We employ a panel data with 46 selected countries and using the Materialist/Postmaterialist 12-item index; we highlight the impact of this postmaterialist index on direct tax revenues. Our study comprises six waves, and it includes the most recent dataset regarding culture dimension, namely World Values Survey Wave 7 (2017–2020). Moreover, we control for country characteristics and endogeneity issues. The results show that the degree of postmaterialism explains the level of direct tax revenues. The findings are robust when we include environmental taxes. These results highlight that cultural attitudes should be considered when studying the level of direct tax revenues and how culture dynamics impact taxation.

Keywords: Culture; Social capital; Taxation (search for similar items in EconPapers)
JEL-codes: A13 H20 Z10 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1057/s41294-021-00162-3

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