A psychometric investigation of the personality traits underlying individual tax morale

Abstract

Why do people pay taxes? Rational choice theory has fallen short in answering this question. Another explanation, called tax morale , has been promoted. Tax morale captures the behavioral idea that non-monetary preferences (like norm-submission, moral emotions and moral judgments) might be better determinants of tax compliance than monetary trade-o s. Herein we report on two lab experiments designed to assess whether norm-submission, moral emotions (e.g., a ective empathy, cognitive empathy, propensity to feel guilt and shame) or moral judgments (e.g., ethics principles, integrity, and moralization of everyday life) can help explain compliance behavior. Although we nd statistically signi cant correlations of tax compliance behavior with empathy and shame, the economic signi cance of these correlations are low more than 80% of the variability in compliance remains unexplained. These results suggest that tax authorities should focus on the institutional context, rather than individual preference characteristics, to handle tax evasion.