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Social frame and tax compliance modulate electrophysiological and autonomic responses following tax-related decisions

Published on Dec 1, 2019in Scientific Reports4.011
· DOI :10.1038/s41598-019-41156-7
Michela Balconi25
Estimated H-index: 25
(UCSC: Catholic University of the Sacred Heart),
Davide Crivelli8
Estimated H-index: 8
(UCSC: Catholic University of the Sacred Heart)
+ 1 AuthorsEdoardo Lozza9
Estimated H-index: 9
(UCSC: Catholic University of the Sacred Heart)
Sources
Abstract
Given the intrinsic complexity of cognitive and affective processes affecting how people reason about taxes and their decisions to be compliant with such social duty, we aimed at exploring those latent processes by combining the analysis of their central and peripheral physiological correlates. We asked participants to make realistic economic decisions concerning tax-payment and manipulated the social vs. individual decisional frame. In addition, we took into account the potential role of tax-compliance trait. Thirty self-employed professionals took part in the study and completed a public good game while their autonomic (skin conductance – SC – and heart rate – HR) and neural brain (electroencephalography – EEG) activities were recorded. The analysis of physiological responses during the feedback phase – where participants could be presented or not with a fiscal audit – highlighted: (i) increased tonic SC levels and theta activity in the social condition than in the individual one; (ii) increased HR values when a fiscal audit did not take place, especially in participants who presented an enforced tax-compliance trait. Present findings support the idea that classic economic theories of tax behaviour developed under the assumption that taxpayers act as rational and individualist agents do not provide a comprehensive account for the decision-making process. They add to available evidence highlighting the contribution of psychological and social-affective variables to individuals’ decision-making processes to pay or evade taxes and to their appraisal of the consequences of such choice, as suggested by the ‘slippery slope’ framework.
  • References (34)
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References34
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#1Cinzia Castiglioni (UCSC: Catholic University of the Sacred Heart)H-Index: 4
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Last. Albino Claudio Bosio (UCSC: Catholic University of the Sacred Heart)H-Index: 7
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This paper presents results from two large-scale natural field experiments that tested the effect of social norm messages on tax compliance. Using administrative data from >200,000 individuals in the United Kingdom, we show that including social norm messages in standard reminder letters increases payment rates for overdue tax. This result offers a rare example of social norm messages affecting tax compliance behavior in a real world setting. We find no evidence that loss framing is more effecti...
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#1Benno Torgler (QUT: Queensland University of Technology)H-Index: 43
After first providing an overview of useful survey data sources and commonly studied variables in the area of tax compliance, this article outlines the major tools and exploratory methods used in the field, including laboratory and field experiments, simulations and surveys. It also discusses future possibilities and the data required to progress in this area. It is thus particularly useful as a guide for those planning or just beginning to work in the tax compliance field.
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Although paying taxes is a key element of a well-functioning society, there is still limited understanding as to why people actually pay their taxes. Models emphasizing that taxpayers make strategic, financially motivated compliance decisions seemingly assume an overly restrictive view of human nature. Law abidance may be more accurately explained by social norms, a concept that has gained growing importance as research attempts to understand the tax compliance puzzle. This study analyzes the in...
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In neoclassical economics the decision to evade tax is analysed in the same way as the decision to commit benefit fraud. Both decisions depend on the net expected utility that a ‘representative individual’ will derive from the gamble. If the financial loss a community experiences when there is tax evasion is equal to the financial loss experienced when there is benefit fraud, there is no reason to expect any difference in individuals' attitudes towards these crimes. However, in practice, individ...
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