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Positive attitudes towards factors such as the perceived fairness of the tax system are considered to play an important role in the level of tax compliance within a…
Positive attitudes towards factors such as the perceived fairness of the tax system are considered to play an important role in the level of tax compliance within a country (Strumpel, 1968). The tax literature indicates that not only knowledge but an understanding of the tax system may have an effect on taxpayers' perceptions of fairness and attitudes towards compliance. This study examines the linkages between an increase in tax knowledge on perceptions of fairness and tax compliance attitudes by using students enrolled in an introductory taxation course in a New Zealand tertiary institution. Contrary to prior research, the results indicated that an increase in tax knowledge did not have a significant impact on perceptions of fairness and tax compliance attitudes.
This chapter examines how public attitudes and judgments about tax fairness reflect distributive justice rules about proportionality/contributions, needs, and equality;…
This chapter examines how public attitudes and judgments about tax fairness reflect distributive justice rules about proportionality/contributions, needs, and equality; fairness issues that influence voluntary tax compliance (Hofmann, Hoelzl, & Kirchler, 2008; Spicer & Lundstedt, 1976). Most public polls and some prior research indicate the general public considers progressive income tax rates as fairer than flat tax rates, a reflection of the Needs rule of distributive justice theory; our 1,138 participants respond similarly. However, two-thirds of our politically representative sample of the American public actually assign “fair shares” of income taxes consistently with fairness-as-proportionality above an exempt amount of income, consistent with the Contributions rule of Equity Theory. We argue experimental assignments of fair shares of income taxes can best be understood as a combination of the Needs rule, applied by exempting incomes below the poverty line from income taxation (via current standard deductions) and taxing incomes above this exempt amount at a single tax rate (i.e., a flat-rate tax) consistent with the Proportionality/Contributions rule. Viewed in combination, these two distributive justice rules explain the tax fairness judgments of 89% of our sample and indicate surprising general agreement about what constitutes a fair share of income taxes that should be paid by US citizens from the 5th percentile to the 95th percentile of the income distribution. The joint application of these fairness rules indicates how seemingly competing, partisan distributive justice concerns can inform our understanding of social attitudes about tax fairness across income classes.
The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium…
The purpose of this paper is to establish the relationship between tax fairness, isomorphic forces, strategic responses and tax compliance in Ugandan small and medium enterprises (SMEs).
This is a correlational and cross-sectional study using two respondent types, the demand (represented by the tax collecting body respondents) and supply (represented by SME respondents) sides of tax compliance, to examine perceived tax compliance in Uganda’s SMEs.
Tax fairness, isomorphic forces and strategic responses have a predictive force on tax compliance. Significant mediation effects of tax fairness and also strategic responses are found. The two respondent types perceive the study variables differently – providing an understanding of why the tax compliance puzzle has remained a burgeoning concern. For example, the tax-collecting body respondents perceived more tax fairness than SME respondents, suggesting that perceived tax fairness depends on whose “lenses” you look through.
Rather than focussing only on the importance of the rational analytical deliberation of tax fairness by taxpayers in influencing their tax compliance, the current paper shows that in addition, isomorphic forces and strategic responses establish the basis for understanding taxpayers’ compliance.
The methodology that enlists two respondent types, i.e. the supply side of tax compliance and the demand side of tax compliance, probably offers a unique way of deriving better results than previous studies.
The objective of this study is to know how income taxpayers perceive the Jordanian income tax fairness and to determine the degree of income taxpayers’ compliance in…
The objective of this study is to know how income taxpayers perceive the Jordanian income tax fairness and to determine the degree of income taxpayers’ compliance in Jordan. Moreover, the study aims to investigate the effect of income tax fairness on taxpayers’ compliance degree in Jordan. An empirical survey using self‐administered questionnaire has been carried out to achieve the objectives of this study. The survey included 275 respondents among income taxpayers in Jordan, but just 246 copies were received. Based on the revision of the literature framework, and in order to achieve the above‐mentioned objectives, eight hypotheses were developed and tested using t‐test through the methods of “one sample t‐test”, and “simple linear regression”. The study reveals that income taxpayers in Jordan perceive the Jordanian income tax as fair. The study also reveals that there is a high degree of income taxpayers’ compliance in Jordan. Moreover, the study concludes that income tax fairness affects income taxpayers’ compliance, but tax fairness alone doesn’t interpret all the change that occurs in taxpayers’ compliance issue.
In this study, we examine the role of temporal framing in the context of tax audit risk. Using construal-level theory, we propose that compared with an every-year frame…
In this study, we examine the role of temporal framing in the context of tax audit risk. Using construal-level theory, we propose that compared with an every-year frame (e.g., 1.5 million returns are audited every year), framing audit risk in an everyday frame (e.g., 4,000 returns are audited every day) will make audit risk seem more likely and thus increase taxpayer compliance. We test whether perceived fairness of the tax system, an individual difference variable related to tax compliance, moderates the effect of temporal framing on behavioral intentions. The results show that communicating risk in a day frame rather than a year frame increases compliance for taxpayers who perceive the tax system as unfair but not for taxpayers who perceive the tax system as fair. Increasing compliance among taxpayers who perceive the tax system as unfair is crucial, as they are less likely to be compliant. Thus, framing audit risk can assist in increasing taxpayer compliance.
This paper evaluates on a comparative basis three different property tax systems, British, French and Swedish. For this purpose an evaluation model, based on two criteria…
This paper evaluates on a comparative basis three different property tax systems, British, French and Swedish. For this purpose an evaluation model, based on two criteria – namely efficiency and fairness – and on a number of sub‐criteria, is used. A comparison of the systems’ efficiency reveals that the French system is the least efficient while the Swedish system is the most efficient. A comparison of the systems’ fairness shows that, despite significant variations in the systems characteristics, all three systems can be evaluated as relatively fair.
Generational theory research suggests that the arrival of the Millennial generation into adulthood will have significant effects on society because of their differing…
Generational theory research suggests that the arrival of the Millennial generation into adulthood will have significant effects on society because of their differing values and attitudes. We examine whether this generation has differing perceptions of tax fairness as well as their attitudes towards tax compliance as compared to other generations by administering an instrument to a sample of 303 taxpayers, distributed approximately equally across three generational groups: Baby Boomers, Generation X, and Millennials. The results suggest that there are significant differences in the viewpoints toward vertical equity and progressive taxation among the three generations. More specifically, the Millennial generation was less likely to recommend progressive taxation than the other two generations. In addition, there were significant differences between the groups on an exchange equity question as well. However, in this situation, it was the Baby Boomers that were significantly different from the other two generations. The results also suggest that the Millennials have attitudes that are more accepting of noncompliance than both the Generation X participants and the Baby Boomer participants. However, a significant difference does not exist between the Baby Boomer participants and Generation X participants on their attitudes towards compliance.
This study examines the impacts of three individual values on the willingness to pay and perceived fairness of use tax on Internet purchases. Analysis of survey data…
This study examines the impacts of three individual values on the willingness to pay and perceived fairness of use tax on Internet purchases. Analysis of survey data collected from 114 taxpayers reveals that while a strong sense of national identity is significantly correlated with fairness perceptions of use tax, it is not significantly related to perception of willingness to pay use tax. Our findings suggest that taxpayers with a high level of religiosity are more willing to pay use tax, although they do not perceive the use tax to be fair.
The purpose of this study was to identify how individuals form fairness judgments about a tax system and what factors they attend to when comparing the fairness of a flat…
The purpose of this study was to identify how individuals form fairness judgments about a tax system and what factors they attend to when comparing the fairness of a flat tax system with the current tax system. Based on equity theory and prior tax research the complexity of the tax system, the policy objectives achieved by the tax system and the financial effect of the tax system were hypothesized to influence individuals' fairness judgments. Further, the function served by an individual's attitude toward the tax system was expected to further explain when, self-interest would be particularly salient.The study's hypotheses were tested using the responses to a questionnaire sent to a cross-section of U.S. citizens. The study participants compared the current federal tax system with a flat tax system that differed from the current system on three dimensions. The alternative system was less complex than the current tax system, it achieved different policy objectives than the current system and the personal tax liability of the participants differed between the two systems. Regression analysis was used to assess the relative influences on the respondents' fairness judgments. Respondents' comparative fairness judgments were influenced by their judgments regarding economic goals achieved by each tax system, unjustified complexity, and, especially, self-interest.
The success of self-assessment tax system is voluntary compliance with the tax laws. When tax evasion is seen as unacceptable, taxpayers will tend to evade tax less…
The success of self-assessment tax system is voluntary compliance with the tax laws. When tax evasion is seen as unacceptable, taxpayers will tend to evade tax less. Hence, the understanding of taxpayers’ attitude on tax morality towards a tax system has to be enhanced to minimize tax evasion cases. The purposes of this study are to examine the relationship between tax fairness, tax knowledge, enforcement level and social exchange towards taxpayers’ attitude of tax morality under the self-assessment system in Malaysia and also to identify the relationship between taxpayers’ attitude of tax morality and taxpayers’ perceptions on tax evasion.
Data were collected from 400 taxpayers through a questionnaire and analysed.
From the analysis, it has been found out that tax knowledge is the most important tax system characteristic that affects taxpayers’ attitude of tax morality. In addition, taxpayers’ attitude of tax morality is significant to taxpayers’ perceptions on tax evasion in Malaysia.
The findings of this study would be useful for the government to further improve the present tax system to increase voluntary tax compliance.