As shown by the recent crisis, tax evasion poses a significant problem for countries such as Greece, Spain and Italy. While these societies certainly possess weaker fiscal institutions as compared to other EU members, might broader cultural differences between northern and southern Europe also help to explain citizens’ (un)willingness to pay their taxes? To address this question, we conduct laboratory experiments in the UK and Italy, two countries which straddle this North-South divide. Our design allows us to examine citizens’ willing- ness to contribute to public goods via taxes while holding institutions constant. We report a surprising result: when faced with identical tax institutions, redistribution rules and audit probabilities, Italian participants are significantly more likely to comply than Britons. Overall, our findings cast doubt upon “culturalist” arguments that would attribute cross-country differ- ences in tax compliance to the lack of morality amongst southern European taxpayers.
The existing experimental literature suggests women are more compliant than men when paying taxes but may free ride more when contributing to public goods. It is unclear which effect dominates when paying for public goods through taxation. Experiments conducted in three European countries and the U.S. are used to investigate this issue. The results suggest that women bear a greater burden of the pro- vision of public goods for the parameters in the experiment. The results indicate the gender gap in com- pliance is due to differences in both the extensive and intensive margins.
Do People Want Something for Nothing?
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Andrighetto et al. | Are Some Countries More Honest than Others? Evidence from a Tax Compliance Experiment in Sweden and Italy
This study examines cultural differences in ordinary dishonesty between Italy and Sweden, two countries with different reputations for trustworthiness and probity. Exploiting a set of cross-cultural tax compliance experiments, we find that the average level of tax evasion (as a measure of ordinary dishonesty) does not differ significantly between Swedes and Italians. However, we also uncover differences in national “styles” of dishonesty. Specifically, while Swedes are more likely to be either completely honest or completely dishonest in their fiscal declarations, Italians are more prone to fudging (i.e., cheating by a small amount). We discuss the implications of these findings for the evolution and enforcement of honesty norms.
Prior research has shown that citizens demand more public spending for government services but are unwilling to support tax increases to cover the increased costs. Yet the basis for this observed inconsistency in fiscal preferences remains unclear. Some scholars propose that the desire “something for nothing” could be the result of citizens lacking knowledge about taxation, public spending, and the inherent trade‐o"s between the two sides of the ledger, while others suggest that citizens sincerely want the bene!ts without paying the
costs. This article contributes to the literature by studying citizens' fiscal scal priorities under the condition of near complete
information about the U.S. federal budget. We used an online budget simulation—based on the actual U.S. federal budget—to provide respondents with information about the structure of the federal budget and gather data on their preferred changes in the budget. Further, we conducted a population‐based survey
and found that respondents express preferences that are more nuanced—and more coherent—than previously suggested.