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Political Alignment, Attitudes Toward Government and Tax Evasion

Julie Cullen (), Nick Turner and Ebonya L. Washington

No 24323, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We ask whether attitudes toward government play a causal role in the evasion of U.S. personal income taxes. We use individual-level survey data to demonstrate a link between sharing the party of the president and trust in the administration generally and opinions on taxation and spending policy, more specifically. Next, we move to the county level, and measure tax behavior as turnover elections push voters in partisan counties into and out of alignment with the party of the president. We provide three types of evidence that alignment reduces evasion. As a county moves into alignment we find 1) taxpayers report more easily-evaded forms of income; 2) suspect EITC claims decrease; and 3) audits triggered and audits found to owe additional tax decrease. Our results provide real-world evidence that a positive outlook on government lowers tax evasion.

JEL-codes: D72 H24 H26 H3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-iue, nep-law, nep-pbe, nep-pol and nep-pub
Date: 2018-02
Note: PE POL
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Working Paper: Political Alignment, Attitudes Toward Government and Tax Evasion (2018) Downloads
Working Paper: Political Alignment, Attitudes Toward Government and Tax Evasion (2018) Downloads
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