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Tax Morale As A Social Norm

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  • MARINESCU, Ada

    (The School of Advanced Studies of Romanian Academy, Department of Economics, Sociology and Law)

Abstract

We will show in this paper that social norms have an influence on shaping tax morality. The classical models of tax behavior explain tax evasion based on a rational utility model. This theory does not account the high rate of tax compliance. Individuals also pay taxes due to a sense of moral duty. Homo oeconomicus, the individual concerned with his utility maximization is replaced with homo sociologicus, who lives in society and is influenced by the other participants to the social process. An individual usually imitates the behavior of others from the group. There are social preferences, social identities, social groups and social norms. According to experiments, people are actually conditional cooperators, not free riders. People cooperate as long as the other people from the group are also cooperating. Tax morale is influenced by several variables such as the perception of tax-payers on the degree of fiscal evasion, age, religiosity, employability, education, social class, trust in the government, trust in the legal system, national pride, pro-democratic attitude, financial satisfaction, personal income, church attendance, direct democracy. If we refer to tax morale as a social norm, individuals can be persuaded to pay taxes due to social pressure. We will refer to the importance of the social dimension when it comes to tax compliance. In accordance with experimental results, we propose the idea that individuals are actually conditional cooperators; they will pay taxes as long as other members of the social group do the same.

Suggested Citation

  • MARINESCU, Ada, 2016. "Tax Morale As A Social Norm," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 3(1), pages 26-32, October.
    • Handle: RePEc:vls:rojfme:v:3:y:2016:i:1:p:26-32
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    References listed on IDEAS

    as
    1. Frey, Bruno S. & Torgler, Benno, 2007. "Tax morale and conditional cooperation," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 136-159, March.
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    7. Alm, James & Torgler, Benno, 2006. "Culture differences and tax morale in the United States and in Europe," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 224-246, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tax morale; tax evasion; social norm; conditional cooperation;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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