Tax Compliance in a Social Setting: the Influence of Norms, Perceptions of Fairness, and Trust in Government on Taxpayer Compliance
Description: Many taxing authorities, including those in the United States (U.S.), rely on voluntary tax compliance and continually search for ways to increase tax revenues. Most of these methods are costly and labor intensive, such as audits and penalties for noncompliance. Prior tax compliance research has heavily investigated the influence that economic factors, such as tax rates and penalties, have on individual compliance intentions. However, economic models fail to fully predict individual tax compliance. Psychology literature suggests that social factors may also play an important role in individual tax compliance decisions. The purpose of this study is to examine the influence that social and psychological factors have on individuals' tax compliance intentions. Specifically, a model of taxpayer compliance is hypothesized that suggests that norms, perceived fairness of the tax system, and trust in government have a significant influence on compliance intentions. Results of a survey of 217 U.S. taxpayers found support for the influence of social factors on tax compliance. This research concludes that social norms have an indirect influence on compliance intentions through internalization as personal norms. Specifically, as the strength of social norms in favor of tax compliance increase, personal norms of tax compliance also increase, and this leads to a subsequent increase in compliance intentions. This dissertation also finds that trust in government and the perceived fairness of the tax system have a significant influence on compliance intentions. Supplemental analyses indicate that trust in government fully mediates the relationship between perceived fairness of the tax system and compliance intentions. This research offers several contributions to accounting literature and provides valuable insight for taxing authorities. First, this study examines taxpayer compliance from a psychological, rather than an economics driven, perspective. The suggested model of taxpayer compliance posits that social norms have a significant influence on compliance intentions. This information ...
Date: August 2013
Creator: Jimenez, Peggy D.
Partner: UNT Libraries