Alm_2012_Rethinking the Research Paradigms for Analyzing Tax Compliance Behavior

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Tulane Economics Working Paper Series

Rethinking the Research Paradigms for Analyzing Tax Compliance Behavior

James AlmDepartment of Economics

Tulane UniversityNew Orleans, LA [email protected]

Erich KirchlerStephan Muehlbacher

Katharina GanglEva Hofmann

Christoph KoglerMaria Pollai

Department of Applied Psychology:Work, Education and Economy

University of ViennaVienna, Austria

[email protected]

Working Paper 1210July 2012

Abstract

In this paper we give our perspective on the different paradigms that have shaped—and seem likely toshape in the future—research in the field of tax compliance behavior. These research paradigms includeviewing tax evasion as a decision under risk made by a single taxpayer, as a social dilemma in whichthere is a tension between individual interests (e.g., cheating on one’s taxes) and collective goals (e.g.,providing public goods), as a series of decisions made by many different types of taxpayers, and as apsychological contract between tax authorities and taxpayers. We argue that these different paradigmsrequire that particular attention be paid to the main “actors in the field”, which involves going beyonda focus on a single taxpayer to consider other taxpayers, tax accountants, the tax authorities, and thegovernment. The ways in which these actors interact in different climates, especially the dynamicsof power and trust between the actors, must also be considered. We conclude with a discussion of a framework—the “slippery slope framework”—that attempts to synthesize these different research

paradigms. Throughout, we illustrate our arguments by reference to research that focuses especially onthe European experience.

Keywords: tax evasion, behavioral economics, social norms, “slippery slope”JEL: H26, D03


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Alm_2012_Rethinking the Research Paradigms for Analyzing Tax Compliance Behavior

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