Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52244
Feld, Lars P; Frey, Bruno S (2006). Tax Compliance as the Result of a Psychological Tax Contract: The Role of Incentives and Responsive Regulation. Working paper series / Institute for Empirical Research in Economics No. 287, University of Zurich.
In this paper, we develop the concept of a psychological tax contract that goes beyond thentraditional deterrence model and explains tax morale as a complicated interaction betweenntaxpayers and the government. Based on crowding theory, the impact of deterrence and rewardsnon tax morale is discussed. As a contractual relationship implies duties and rights for each contract partner, sticking to the fiscal exchange paradigm between citizens and the statenincreases tax compliance. Citizens are willing to honestly declare income even if they do not receive a full public good equivalent to their tax payments as long as the political process is perceived to be fair and legitimate. At the procedural level, a friendly treatment of taxpayers by the tax office in auditing processes increases tax compliance.
|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics|
Working Paper Series > Institute for Empirical Research in Economics (former)
|Deposited On:||29 Nov 2011 23:47|
|Last Modified:||09 Jul 2012 07:03|
|Series Name:||Working paper series / Institute for Empirical Research in Economics|
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