Nice Guys Finish Last: Are People with Higher Tax Morale Taxed more Heavily?

Philipp Doerrenberg, Denvil Duncan, Clemens Fuest and Andreas Peichl

No 3858, CESifo Working Paper Series from CESifo

Abstract: This paper provides evidence of efficient taxation of groups with heterogeneous levels of ‘tax morale’. We set up an optimal income tax model where high tax morale implies a high subjective cost of evading taxes. The model predicts that ‘nice guys finish last’: groups with higher tax morale will be taxed more heavily, simply because taxing them is less costly. Based on unique cross-country micro data and an IV approach to rule out reverse causality, we find empirical support for this hypothesis. Income groups with high tax morale systematically face higher average and marginal tax rates. To the best of our knowledge, this is the first paper to investigate whether differences in tax morale affect the distribution of the tax burden across different groups of taxpayers.

Keywords: tax morale; tax compliance; optimal taxation; political economy (search for similar items in EconPapers)
JEL-codes: D70 H20 H30 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp3858.pdf (application/pdf)

Related works:
Working Paper: Nice guys finish last: are people with higher tax morale taxed more heavily? (2012)
Working Paper: Nice Guys Finish Last: Are People with Higher Tax Morale Taxed More Heavily? (2012)
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:ces:ceswps:_3858

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().