Taxation and Conditional Cooperation

CREMA Working Paper No. 2004-20

29 Pages Posted: 7 Feb 2005

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Benno Torgler

Yale University - Yale Center for International and Area Studies

Date Written: August 2004

Abstract

Why so many people pay their taxes, although fines and audit probability are low, has become a central question in the tax compliance literature. Concepts of Homo Economicus, endowed with a more refined motivation structure, help to shed light on the tax compliance puzzle. This paper provides empirical evidence for the relevance of conditional cooperation, using survey data from 30 European countries. The findings suggest that a higher perceived tax evasion leads to a lower tax morale, also when controlling for additional factors in a multivariate analysis.

Keywords: Tax morale, tax compliance, tax evasion, pro-social behavior

JEL Classification: H26, H73, D64

Suggested Citation

Frey, Bruno S. and Torgler, Benno, Taxation and Conditional Cooperation (August 2004). CREMA Working Paper No. 2004-20, Available at SSRN: https://ssrn.com/abstract=662083 or http://dx.doi.org/10.2139/ssrn.662083

Bruno S. Frey (Contact Author)

CREMA ( email )

Südstrasse 11
Zurich, CH 8008
Switzerland
+41 44 380 00 78 (Phone)

University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
Switzerland

Benno Torgler

Yale University - Yale Center for International and Area Studies ( email )

P.O. Box 208206
New Haven, CT 06520-8206
United States

HOME PAGE: http://www.crema-research.ch/fellowseiten/torgler.htm

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