An Experimental Investigation of How Ethical Orientations, Tax Rates, Penalty Rates, and Audit Rates Affect Tax Compliance Decisions

Dissertation, The University of Tennessee (1997)
  Copy   BIBTEX

Abstract

This study examines whether the ethical orientations of idealism and/or relativism influence an individual's decision to honestly report his/her tax liability. In addition, this research uses Spicer's model to investigate whether the tax rate, audit rate, or the penalty rate interact with either ethical orientation to affect an individual's tax compliance. ;Forsyth's Ethics Position Questionnaire was used to measure each subject's level of idealism and relativism. The constructs of relativism and idealism were used as covariates in the analysis. The three independent variables or factors were: tax rate , the audit rate , and the penalty rate . The dependent variable is the compliance rate, computed by dividing the declared taxable income by the actual taxable income. An experiment was conducted in a computer laboratory using 120 subjects. A computer simulation provided revenue and expense amounts for each subject. In addition, the subjects used the computer to file several simplified tax reports. ;The results from the experiment revealed that tax rate, idealism, and relativism were significant explanatory variables. Low idealists attempted more tax evasion than high idealists . Thus, moral attitudes do affect tax compliance. Furthermore, the results imply an increase in the tax rate will increase tax noncompliance. In addition, the results indicate that the tax rate and idealism interact significantly. The lower an individual's idealism, the more noncompliant he/she becomes as the tax rate increases. Finally, neither the audit rate nor penalty rate were found to be strongly related to tax compliance in this experiment

Other Versions

No versions found

Links

PhilArchive

    This entry is not archived by us. If you are the author and have permission from the publisher, we recommend that you archive it. Many publishers automatically grant permission to authors to archive pre-prints. By uploading a copy of your work, you will enable us to better index it, making it easier to find.

    Upload a copy of this work     Papers currently archived: 103,748

External links

  • This entry has no external links. Add one.
Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Similar books and articles

Analytics

Added to PP
2015-02-07

Downloads
0

6 months
0

Historical graph of downloads

Sorry, there are not enough data points to plot this chart.
How can I increase my downloads?

Citations of this work

Add more citations

References found in this work

No references found.

Add more references