We find experimental evidence that the decision problem of tax compliance changes if subjects ́declarations are not randomly assessed, but is based on their appearance as captured by pictures of their faces, even if the aggregate audit probability does not change. Some subjects may fear that...

This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80%...

This paper studies the effect of endogenous audit probabilities on reporting behavior in a face-to-face compliance situation such as at customs. In an experimental setting in which underreporting has a higher expected payoff than truthful reporting we find an increase in compliance of about 80%...

Tax evasion costs governments worldwide trillions of U.S. dollars. Thus, a comprehensive understanding of tax evasion behavior is needed to ensure that tax evasion is combatted effectively. Using different controlled and incentivized experiments, we analyze whether taxpayers are more willing to...

The economic models of tax compliance predict that individuals should evade taxes when the expected benefit of cheating is greater than its expected cost. When this condition is fulfilled, the high compliance however observed remains a puzzle. In this paper, we investigate the role of emotions...

Arguably, for many citizens the perceived expected disutility from sanctions is smaller than the monetary gain from tax evasion. Nevertheless most people pay their taxes most of the time. In a lab experiment, we show that the willingness to pay taxes even absent enforcement is indeed pronounced....

We use income survey data linked with tax records at the individual level for Estonia to estimate the determinants and extent of income tax compliance in a novel way. Unlike earlier studies attributing income discrepancies between such data sources either to tax evasion or survey measurement...

We estimate the extent of income underreporting among working households, using data from an income survey linked with individual tax records for Estonia. Income underreporting is inferred from consumption propensities, following and extending the method by Pissarides andWeber (1989). Our...

This paper is analyzing tax morale in three selected European countries through the evaluation of the results of the European Values Study. The main aim is to identify the factors that influence taxpayers' decisions on the issue of whether they justify cheating on tax or not. The dependence and...