Expanding the Theory of Tax Compliance from Individual to Group Motivations

James Alm ()

No 1309, Working Papers from Tulane University, Department of Economics

Abstract: Taxpayers face well-known and well-identified individual motivations in their compliance decisions, motivations that originate with the standard economic model of tax evasion in which financial incentives are shaped by audit, penalty, and tax rates. However, there is growing evidence that these individual incentives, while important, are not always decisive. Individuals do not always behave as the selfish, rational, self-interested individuals portrayed in the standard neoclassical paradigm, but rather are often motivated by many other factors that have as their main foundation some aspects of social norms, morality, altruism, fairness, or the like, factors that I broadly and no doubt imprecisely lump together as group motivations. I argue that the compliance puzzle can be explained, at least in part, by expanding the standard analysis of individual compliance behavior to incorporate the important ways in which individual decisions are shaped by group motivations. I also provide empirical and experimental evidence to support these arguments, and, I suggest – and predict – some promising lines of future research.

Keywords: tax evasion; behavioral economics; experimental economics (search for similar items in EconPapers)
JEL-codes: C9 D03 H2 H26 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2013-02
New Economics Papers: this item is included in nep-acc, nep-cbe, nep-cdm, nep-exp, nep-hpe, nep-iue and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://repec.tulane.edu/RePEc/pdf/tul1309.pdf First Version, February 2013 (application/pdf)

Related works:
Chapter: Expanding the theory of tax compliance from individual to group motivations (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:tul:wpaper:1309

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