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Culture, Compliance, and Confidentiality: Taxpayer Behavior in the United States and Italy

James Alm (), Michele Bernasconi (), Susan Laury, Daniel Lee () and Sally Wallace ()
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Michele Bernasconi: Department of Economics, CÃ Foscari University Of Venice

No 2016:36, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: This paper analyzes the impact of confidentiality of taxpayer information on the level of compliance in two countries with very different levels of citizen trust in government – the United States and Italy. Using identical laboratory experiments conducted in the two countries, we analyze the impact on tax compliance of "Full Disclosure" (e.g., release of photos of tax evaders to all subjects, along with information on the extent of their noncompliance) and of "Full Confidentiality" (e.g., no public dissemination of photos or noncompliance). Our empirical analysis applies a two-stage strategy that separates the evasion decision into its extensive (e.g., "participation") and intensive (e.g. "amount") margins. We find strong support for the notion that public disclosure acts as an additional deterrent to tax evaders, and that the deterrent effect is concentrated in the first stage of the two-stage model (or whether to evade or not). We also find that the deterrent effect is similar in the U.S. and in Italy, despite what appear to be different social norms of compliance in the two countries.

Keywords: Tax compliance; experimental economics; confidentiality; social norma (search for similar items in EconPapers)
JEL-codes: H2 H3 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2016
New Economics Papers: this item is included in nep-exp, nep-iue, nep-pbe and nep-soc
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Journal Article: Culture, compliance, and confidentiality: Taxpayer behavior in the United States and Italy (2017) Downloads
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