Illegal, Immoral, Fattening or What?: How Deterrence and Responsive Regulation Shape Tax Morale

Lars Feld and Bruno Frey

No 200426, Marburg Working Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: The traditional economic approach to tax evasion does not appear to be particularly successful in explaining the extent of tax compliance. It is often argued that reciprocity norms which establish a fiscal exchange between the state and the citizens shape tax morale to a large extent. In that respect, a case study of Switzerland may be useful because the small size of the cantons and their direct democratic political systems procedurally establish a close exchange relationship between taxpayers and tax authorities. In this paper, evidence is discussed on how tax morale in Switzerland evolved over time. In addition, the impact of economic, legal, socio- demographic, psychological and institutional factors on Swiss tax evasion is analyzed. It can be concluded that Switzerland’s system of responsive regulation increases tax morale.

Keywords: Tax Evasion; Tax Morale; Deterrence; Responsive Regulation. (search for similar items in EconPapers)
JEL-codes: D73 D78 H26 H73 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Forthcoming in Friedrich Schneider and Chris Bajada (eds.), Size, Cause and Consequences of the Underground Economy, 2004.

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Persistent link: https://EconPapers.repec.org/RePEc:mar:volksw:200426

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