Misperceptions of social norms about tax compliance

Abstract

Taxpayers may estimate others' acceptance of tax evasion as being greater than their own. This self-other discrepancy in tax ethics could undermine people's tax compliance as they conform to the misperceived social norm. Feedback about the self-other discrepancy could correct the misperception and improve compliance. This approach was first tested in a scenario study with 64 students. Respondents showed the expected self-other discrepancy in tax ethics and feedback about the finding increased their hypothetical compliance. Further results showed that the effect was due to the intervention improving the perception of others' tax ethics, as expected. Study 2, a field experiment with 1500 Australian taxpayers, replicated the self-other discrepancy and provided taxpayers with information about the result. Compared to control groups, the feedback did not affect work-related expenses claims but significantly reduced other deduction claims. Show more