IngentaConnect Understanding Surveys of Taxpayer Honesty

Authors: Wilson, Janine L.F.; Sheffrin, Steven

Source: FinanzArchiv: Public Finance Analysis, Volume 61, Number 2, June 2005 , pp. 256-274(19)

Abstract:

Standard models of taxpayer compliance have fallen short of predicting the degree of honesty found in the data. We contribute to the more recent literature assessing cultural factors in the decision to underreport. We find that there are two forms of possible misspecification in the current models of taxpayer compliance. First, we use econometric methods for detecting misclassification of the dependent variable in a probit model, applying them to a recent IRS-sponsored survey. We find evidence of misspecification, which may suggest that taxpayers are not fully truthful in their survey responses, a result that helps to reconcile findings from survey data with studies using other methods. Second, we divide the sample into those individuals who have an intense sense of ''tax morality'' and those who do not, in order to compare groups with differing tax cultures. We find that the two groups are indeed influenced differently by the factors that have been commonly found in the literature, such as opinions regarding the fairness of the tax system.

Keywords: TAX COMPLIANCE; MISSPECIFICATION OF DEPENDENT VARIABLE

Document Type: Research article

DOI: 10.1628/0015221054553557

The full text electronic article is available for purchase. You will be able to download the full text electronic article after payment.

$33.00 plus tax Refund Policy