Correlates of tax evasion

Tax evasion has increased in the United States. Estimates of evasion indicate that the amount of federal income taxes evaded equals the federal deficit. Thus, controlling tax evasion should be a major concern of future tax policy decisions. This study analyzes the effects of 18 variables that might affect tax evasion. Specifically, the variables were used as independent variables in discriminant analyses to determine their relationship to tax evasion. The results indicated that the variables affect different types of tax evasion differently, and that all variables do not significantly influence tax evasion. Policy implications are presented based on these results.     

An application of attribution and equity theories to tax evasion behavior

Traditional economic theory often has been utilized in an attempt to explain tax evasion behavior. Although economic consequences are important factors in the understanding of tax evasion behavior, they alone do not appear adequate to describe and predict the phenomenon. The results of two experiments which apply two social psychological theories, attribution theory and equity theory, to tax evasion judgments are reported. In the first experiment, the effects of personal need and degree of societal consensus were investigated. Both variables significantly affected recommended penalty judgments. In the second experiment, the effects of societal need and distinctiveness were studied. Neither societal need nor distinctiveness affected recommended penalty judgments. However, a significant interaction effect was found concerning subjects' behavioral intentions to evade. The present research suggests that both attribution theory and equity theory may be helpful in formulating hypotheses and enhancing our understanding of tax evasion behavior.     

Possible causes of tax evasion

Only a limited number of empirical investigations, into possible causes of tax evasion, have been carried out. Most of these have been conducted since 1970 and they have been carried out in countries other than Australia. Much of the published research was reviewed lo develop a set of hypotheses which were then tested with Australian data. The results of those tests are reported in this article. It appears that several things might influence taxpayer's behaviour and in Australia, the exchange indicator could be one of the important influences.     

Taxes and economic behavior: Some interview data on tax evasion in Sweden

The article describes a survey carried out with a sample of 426 Swedish male adults. In telephone interviews questions were asked on attitudes to taxation, attitudes to tax crimes, the respondent's economic situation, tax evasion in the sense of underreporting income and overstating deductions, black payments, and tax planning, i.e. attempts to reduce the tax burden by legal means. Multivariate analyses of the data indicated that younger age, more opportunity for tax evasion than people in general, more negative attitudes than the average, and lenient attitudes to tax crimes were significant factors for explaining tax evasion and black payments. Financial strain was not a significant factor, since those who admitted tax evasion judged their economic situation more favorably than the rest of the sample.     

Perceived tax evasion and the importance of trust

Using Swedish individual survey data, we analyze the perception of tax evasion in terms of ten different taxes. We find large variation across taxes, highlighting the importance of studying different taxes separately rather than treating tax evasion as one common phenomenon. We focus on the importance of trust in taxpayers and in politicians. Those who do not trust their fellow citizens are more likely to believe that they are evading taxes, but distrust in politicians has an even greater effect, especially for redistributive and fiscally motivated taxes. Hence, it is important for politicians to be perceived as trustworthy in order to be able to collect taxes for maintaining the welfare state.     

True positives and false alarms in the detection of tax evasion

The probability of errors in tax returns has not been modeled explicitly before. However, corrections on individual tax returns, made by the fiscal authorities, may be related both to tax evasion and to errors made by the taxpayers. The probabilities of detecting tax evasion (true positives) and errors in tax returns (partly interpreted as false alarms) are specified and parametrized by variables known from the literature. In an empirical survey, the response to a questionnaire has been combined with information from the tax administration regarding tax returns. Taxpayers' willingness and ability to conceal income from the tax authorities are key factors with respect to tax evasion. Furthermore, the model enables the estimation of tax evasion probability, given the level of education and the opportunity to conceal income. The probabilities of tax evasion and errors could be explained to some extent.     

An agent-based model of network effects on tax compliance and evasion

Agent-based models are flexible analytical tools suitable for exploring and understanding complex systems such as tax compliance and evasion. The agent-based model created in this research builds upon two other agent-based models of tax evasion, the Korobow et al., 2007, Hokamp and Pickhardt, 2010 models. The model utilizes their rules for taxpayer behavior and apprehension of tax evaders in order to test the effects of network topologies in the propagation of evasive behavior. Findings include that network structures have a significant impact on the dynamics of tax compliance, demonstrating that taxpayers are more likely to declare all their income in networks with higher levels of centrality across the agents, especially when faced with large penalties proportional to their incomes. These results suggest that network structures should be chosen selectively when modeling tax compliance, as different topologies yield different results. Additionally, this research analyzed the special case of a power law distribution and found that targeting highly interconnected individuals resulted in a lower mean gross tax rate than targeting disconnected individuals, due to the penalties inflating the mean gross tax rate in the latter case.     

Learning in experiments: Dynamic interaction of policy variables designed to deter tax evasion

While neoclassical economic theory sheds insight into the way that audit rates and penalty rates interact when individuals decide to declare income for taxation, it predicts far lower levels of compliance than observed levels of compliance. This paper analyses experimental responses to explore a dynamic interaction between audit and penalty rates as individuals learn how to comply with taxation. It compares the responses of subjects in experiments with responses that are predicted when individuals rely on an adaptive learning process (that offers information feedback about decision payoffs). This comparison suggests that learning is an important consideration when explaining differences between predicted and observed levels of tax compliance.     

Geneticization of deviant behavior and consequences for stigma: the case of mental illness

One likely consequence of the genetics revolution is an increased tendency to understand human behavior in genetic terms. How might this "geneticization" affect stigma? Attribution theory predicts a reduction in stigma via reduced blame, anger, and punishment and increased sympathy and help. According to "genetic essentialist" thinking, genes are the basis of human identity and strongly deterministic of behavior. If such ideas are commonly accepted, geneticization should exacerbate stigma by increasing perceptions of differentness, persistence, seriousness, and transmissibility, which in turn should increase social distance and reproductive restrictiveness. I test these predictions using the case of mental illness and a vignette experiment embedded in a nationally representative survey. There was little support for attribution theory predictions. Consistent with genetic essentialism, genetic attributions increased the perceived seriousness and persistence of the mental illness and the belief that siblings and children would develop the same problem. Genetic attribution did not affect reproductive restrictiveness or social distance from the ill person but did increase social distance from the person's sibling, particularly regarding intimate forms of contact involving dating, marriage, and having children.     

Research note: The consequences of different methods for handling missing network data in stochastic actor based models

Although stochastic actor-based models (e.g., as implemented in the SIENA software program) are growing in popularity as a technique for estimating longitudinal network data, a relatively understudied issue is the consequence of missing network data for longitudinal analysis. We explore this issue in our research note by utilizing data from four schools in an existing dataset (the AddHealth dataset) over three time points, assessing the substantive consequences of using four different strategies for addressing missing network data. The results indicate that whereas some measures in such models are estimated relatively robustly regardless of the strategy chosen for addressing missing network data, some of the substantive conclusions will differ based on the missing data strategy chosen. These results have important implications for this burgeoning applied research area, implying that researchers should more carefully consider how they address missing data when estimating such models.     

Children's understanding of the interpersonal consequences of dissemblance of nonverbal emotional-expressive behavior

Eighty-five children in three age groups (6–7, 10–11, and 13–14 years) participated in an interview study in which their beliefs were elicited about how others are likely to react when one presents an emotional front. They also responded to questions about (a) their preference for adults versus peers as targets of genuine emotional expressiveness, (b) expected outcomes for children who either almost never reveal their feelings or who almost always do, and (c) how they construct a balance for themselves between when to reveal their real feelings and when not to. Age and sex differences were found for some social contexts and not for others. The oldest girls stood out on a number of comparisons as a unique group: They were more likely to believe that dissembled expressions would be taken at face value in a couple of social contexts, they were more likely to prefer peers as the recipients of genuine emotional-expressive displays, and they gave more complex reasoning about how to achieve a balance between dissemblance and expression of genuine feelings. The data are discussed from the standpoint of how naive theories of emotion are used by children to make sense of their social relations.I would like to express my appreciation to the children and staff of Rohnert Park School District for participating in this investigation. I also want to thank Jane Weiskopf for her help in interviewing the children and Michael Crowley for his undertaking of the statistical analyses.     

Monitoring youth behavior in response to structural changes. Alternative approaches for measuring adolescent drinking

Random digit dial (RDD) telephone and self-administered school-based surveys of drinking and drinking and driving were compared for adolescents from two Northern California communities. The RDD and school-based surveys resulted in very different samples. The telephone sample contained a greater proportion of European Americans and a smaller proportion of Asian Americans and "other" ethnicities. Respondents to the telephone sample also tended to be older and of higher socioeconomic status (SES). The telephone survey captured very few school dropouts. Moreover, it resulted in lower self-reports of drinking and drinking and driving. Survey mode appeared to influence respondents equally, regardless of their gender, age, ethnicity, or SES.     

The backfiring effect of auditing on tax compliance

Using country-level data from 2003–2014, we examine the association between auditing level (measured as number of verification actions taken by tax authorities per 100 taxpayers in each country) and tax compliance (measured as business executives’ perception of tax evasion). Our hypothesis is that compliance increases until a certain auditing level is reached, and decreases beyond that level (i.e., an elevated auditing level backfires). In line with our expectation, the results of a series of tests indicate that there is a U-shaped association between auditing and tax evasion. We discuss how a potential backfiring effect may depend on the extent to which compliance is voluntary.     

The legal consequences for children born of chemically dependent mothers

The justice system has witnessed the negative consequences of chemical abuse. Infants are especially vulnerable to harm as a result of maternal drug use. This article uses a legal perspective to examine the conflict between maternal and fetal rights and reviews selected decisions and laws designed to protect children from maternal drug use. It advocates a policy of state intervention in order to protect children from the damage which can accompany maternal chemical use.     

The political viability of a negative income tax

This paper offers three propositions relating to the political viability of the negative income tax. One, despite its work disincentive, a majority of households would support a linear income tax that makes cash payments to low income households. However two, when government consumption is sufficiently high, a majority would favor a proportional tax over such a tax. Three, under certain conditions, a majority of households will prefer public provision of a private good or an in-kind transfer to a negative income tax. These latter two propositions offer an explanation for the public's apparent distaste for widespread cash transfers. Received: 17 September 1999/Accepted: 21 April 2000     

The political consequences of contemporary immigration

This article synthesizes research on political outcomes associated with increasing immigration, with an emphasis on cross‐national studies of European countries, where immigration is a relatively newer phenomenon compared to the United States and other traditional immigrant destinations. We begin with explanations of and research on anti‐immigrant sentiment, not a political phenomenon in itself but considered an important precursor to other relevant political attitudes. Next, we review scholarship on the relationship between immigration and support for the welfare state, as well as exclusionary attitudes regarding immigrants' rights to welfare benefits. Then, we review research on immigration and political party preferences, in particular radical right parties, whose platforms often combine anti‐immigration and welfare chauvinistic positions. We conclude by discussing how these processes may ultimately shape social policies, which may in turn influence immigration itself.     

Effect of training different classes of verbal behavior to decrease aberrant verbal behavior

Inappropriate verbal behavior that is labeled "psychotic" is often described as insensitive to environmental contingencies. The purpose of the current study was to establish different classes of rational or appropriate verbal behavior in a woman with developmental disabilities and evaluate the effects on her psychotic or aberrant vocal verbal behavior. Similar to a previous study (Arntzen, Ro Tonnessen, & Brouwer, 2006), the results of the current study suggested that the procedure helped to establish a repertoire of appropriate functional vocal verbal behavior in the participant. Overall, the results suggested the effectiveness of an intervention based on training various classes of verbal behavior in decreasing aberrant verbal behavior.     

Willingness to pay tax: The Laffer curve revisited for 12 OECD countries

According to Laffer, economic activities are a decreasing function of the taxation rate. As a consequence, total tax revenue increases with the taxation rate at its lower levels and decreases against it at its higher levels. The result is the Laffer curve. According to him, the reason for this decrease lies in decreasing economic activities. Although this may be true for activities in the official (white) sector, in the unofficial (black) sector they can increase under the influence of an increasing taxation rate. Part of the Laffer effect may be nothing more than an activity switch away from the white towards the (hidden) black sector. This paper takes both effects into account: decreasing activities in the white sector combined with increasing activities in the black sector. It examines the computation of the maximum tax revenue generating taxation rate for a number of OECD countries. It concludes that, with the exception of Sweden, the marginal taxation rate in these countries is below its optimum.