In this short paper I will develop a conceptual proposal to explore the relationship between public social spending (PSS) and tax morale. The latter has experienced more and more interest among scholars in the past several decades in order to clarify the “puzzle of tax compliance”, which is to explain, why tax compliance turns out to be substantially higher than the neo-classical model would estimate. Since research has provided empirical evidence for the impact of tax morale on tax compliance, scientists are faced with the challenge to come up with determinants of tax morale. This paper suggests public social spending as a determinant. On the basis of the existing research literature, I set up a research hypothesis, which shall to be tested in the context of three selected countries. A research concept is described while possible limitations are taken into account. These considerations as well as potential promises of the concept are summed up in the conclusion.
Table of Contents
1. Literature Review and Research Question
2. Research Structure
2.1. Case Study Selection
2.2. Methods
2.3. Limitations
3. Conclusion
4. Bibliography and List of Figures
Research Objectives and Themes
This research proposal aims to investigate the potential causal relationship between the scope of public social spending and individual tax morale. The central research question seeks to clarify whether higher levels of state-provided social services influence the intrinsic motivation of citizens to comply with tax obligations, thereby offering an alternative explanation to the traditional neoclassical model of rational tax evasion.
- Theoretical examination of tax morale as a determinant of tax compliance
- Evaluation of social spending as a psychological and economic motivator
- Comparative analysis of welfare state typologies (Anglo-Saxon, Corporatist, Scandinavian)
- Methodological design using quantitative survey data (World Values Survey)
- Discussion of operationalization challenges and data limitations
Excerpt from the Book
1. Literature Review and Research Question
In order to gain an overview on the existing research, a literature review has been conducted in the time period 11/2016 and 12/2016. For this purpose, I mainly relied on the data basis of the University Library of Potsdam, Web of Knowledge as well as some open sources such as Library Genesis and Sci Hub, using the search items tax morale, tax compliance, tax fraud, welfare state, redistribution, public goods, public spending and the according equivalents in German language. Basing on the literature, I formulated the following research question: Is there a relation between the scope of public social spending and individual tax morale?
The problem of tax evasion is as old as the idea of taxation itself and such has been commented on already by the ancient scholar Plato: "When there is an income tax, the just will pay more and the unjust less." – Plato
At the same time, it is a well-known fact that the standard economy model after Allingham and Sandmo (1972) describes the phenomenon of tax evasion only insufficiently. The paradigm of a rational individual, maximizing his benefits as a homo oeconomicus, forms the basis of this model. The individual is expected to balance the advantage of successful tax evasion against the risk of detection and potential penalties. The existing tax compliance though has to be estimated much higher than expected by neoclassical theory (see Long and Swinger 1991, Frey 1999); in contrast, many studies even hypothesize that high audit rates have a negative effect on tax compliance through a “crowding-out” effect on intrinsic motivation (Alm, McClelland and Schulze 1999). As a consequence of that, much academic work of the past decades tried to develop alternative approaches towards tax compliance.
Summary of Chapters
1. Literature Review and Research Question: This chapter reviews existing academic literature on tax morale and compliance, establishing the gap that justifies the investigation of public social spending as a potential determinant.
2. Research Structure: This chapter outlines the conceptual framework, hypothesis, and the methodology, including the selection of case studies and the operationalization of variables.
2.1. Case Study Selection: This section justifies the focus on three specific welfare state models (UK, Germany, Sweden) to enable a meaningful cross-country comparison.
2.2. Methods: This section describes the proposed quantitative research design utilizing survey data from the World Values Survey to assess tax morale.
2.3. Limitations: This section addresses potential biases, data limitations, and conceptual challenges inherent in measuring multidimensional constructs like tax morale.
3. Conclusion: This chapter summarizes the research proposal and reiterates the potential contribution to understanding tax compliance behaviors beyond traditional economic theory.
4. Bibliography and List of Figures: This chapter provides a comprehensive list of all cited academic sources and the visual data utilized in the research proposal.
Keywords
Tax morale, Tax compliance, Public social spending, Welfare state, Redistribution, Rational choice, Homo oeconomicus, Tax evasion, Social norms, World Values Survey, Quantitative research, Fiscal policy, Intrinsic motivation, Social exchange, OECD.
Frequently Asked Questions
What is the fundamental focus of this research paper?
The paper explores the relationship between public social spending and individual tax morale to understand why citizens pay taxes even when audit rates are low.
What are the core thematic areas addressed?
The core themes include tax compliance behavior, the influence of the welfare state on individual psychology, and the role of social spending as a reciprocal factor in taxation.
What is the primary research question?
The research asks whether there is a measurable relation between the scope of a country's public social spending and the level of its citizens' individual tax morale.
Which scientific method is proposed?
The author proposes a quantitative study, utilizing survey data from the World Values Survey (WVS) to analyze tax morale across different welfare state models.
What topics are covered in the main body?
The main body covers the literature on tax evasion models, the identification of tax morale determinants, the justification of country selection, and methodological challenges in data collection.
Which keywords define this research?
Key terms include tax morale, tax compliance, public social spending, welfare state, and intrinsic motivation.
How does this research differ from the standard economic model?
It moves away from the "homo oeconomicus" model of rational self-interest by suggesting that social factors and government services influence human behavior significantly.
Why are Sweden, Germany, and the UK selected for this study?
They represent distinct welfare state typologies (Scandinavian, Corporatist, and Anglo-Saxon), which allow for a comparative analysis of how different social spending levels correlate with tax attitudes.
What are the primary limitations acknowledged by the author?
The author identifies challenges such as the difficulty of measuring "tax morale" with single survey questions, potential respondent bias, and the difficulty of isolating social spending as a direct cause.
- Citation du texte
- Sven Piechottka (Auteur), 2016, What you pay is what you get? Public Social Spending and Tax Morale, Munich, GRIN Verlag, https://www.grin.com/document/372000
