Legitimate authorities and rational taxpayers

An investigation of voluntary compliance and method effects in a survey experiment of income tax evasion

Blaine Robbins, Edgar Kiser

Research output: Contribution to journalArticle

Abstract

In order to collect the revenue necessary to fund public goods, a state is often required to both deter tax evasion and encourage voluntary tax compliance on the part of its citizens. While most prior research has focused on explaining tax evasion with standard economic model parameters, there has been growing interest in identifying the determinants of voluntary compliance. We build on this work by proposing a legitimacy-based model of tax compliance that accounts for why some citizens voluntarily comply with their tax obligations and others do not. To test our model, we develop and administer a survey experiment of income tax evasion to a large random sample of undergraduate students. We also investigate the extent to which design-based method effects bias our results, such as order effects, complexity effects, and missing information effects. Substantively, results strongly support the standard economic model of deterrence and weakly support the legitimacy-based model of voluntary compliance. Methodologically, we find no evidence of order effects, weak evidence of complexity effects, and suggestive evidence of missing information effects.

Original languageEnglish (US)
Pages (from-to)247-301
Number of pages55
JournalRationality and Society
Volume30
Issue number2
DOIs
StatePublished - May 1 2018

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tax evasion
income tax
experiment
taxes
economic model
legitimacy
citizen
evidence
deterrence
random sample
obligation
revenue
determinants
trend

Keywords

  • Legitimacy
  • method effects
  • multilevel model
  • standard economic model
  • survey experiment
  • tax evasion

ASJC Scopus subject areas

  • Sociology and Political Science
  • Social Sciences (miscellaneous)

Cite this

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