In attempting to understand what drives tax morale (the technical term for how happy people are to pay their taxes) we may be inclined to think of healthcare, social security, education, national defense and the legal obligation imposed by the institutions to do so, as reasons why we pay taxes. However, tax compliance behaviour may also be attributed, for example, to:
- the taxpayers’ culture, self-interest and/or sense of identity;
- the "social actor perspective" that gives primacy to tax morale by virtue of social norms;
- the rules in a taxpayers' society and their enforcement;
- the size of the tax jurisdiction;
- the taxpayers' ability to “cheat” the system i.e., due to institutional inefficiencies or by being required to self-report;
- the history and behaviour of the state coupled with a potential perception of corruption;
- the state keeping to their "social contract" i.e., fulfilling their “part of the bargain”.
Words such as "avoidance", "evasion" and "mitigation" are often associated with taxation and dissecting the behaviours which result in taxpayers avoiding, evading or mitigating their tax responsibilities may assist institutions in the design of their tax policies and tax administration.
The reasons behind some individuals having an intrinsic willingness to pay tax and others being more hesitant to do so has been discussed in Episode 5 of Series 3 of the International Tax Bites podcast. Graham Jackson and Harriet Brown consider the causes and science of tax compliance behaviour with Sven Steinmo and John D’Attoma, exploring further the factors that influence whether people pay their taxes.
Sven Steinmo and John D'Attoma are respected academics from the University of Colorado, Boulder, United States who co-authored ‘Willing to Pay’, the first edition was published this year (2022) by the Oxford University Press. In 2018, the Oxford University Press published ‘Leap of Faith’ to which both Sven Steinmo and John D'Attoma contributed and Sven Steinmo edited.