Tax Evasion and the Importance of Trust

Hammar, Henrik,1970Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik, Enheten för miljöekonomi,Department of Economics, Environmental Economics Unit (författare)

Unless people pay the taxes they are obliged to pay, a general welfare state will eventually collapse. Thus, for the welfare state to survive in the long run, tax compliance is of utmost importance. Using Swedish individual survey data we analyze which factors affect the perception of tax evasion. The analysis is conducted on ten different taxes and the results differ widely. Hence, we show that it is important to study different taxes separately rather than treating tax evasion as one common phenomenon. In this paper we focus on the importance of different kinds of trust. Whether or not people in general are regarded as trustworthy only has a minor impact on perceived tax evasion. Instead, what matters is trust or distrust in politi- cians. People who distrust the parliament are more likely than others to think that tax evasion is common, and the result holds for most of the taxes studied. This may have severe long-run consequences for the welfare state. If people stop trusting their leading politicians, social norms about tax compliance deteriorate and the possibilities of collecting taxes for maintaining the welfare state are reduced.

SAMHÄLLSVETENSKAP Ekonomi och näringsliv Nationalekonomi hsv//swe
SOCIAL SCIENCES Economics and Business Economics hsv//eng
trust in politicians; generalized trust; social capital; general welfare state; tax policy; tax compliance

Jagers, Sverker C.,1967Gothenburg University,Göteborgs universitet,Statsvetenskapliga institutionen,Department of Political Science(Swepub:gu)xjagsv (författare)
Nordblom, Katarina,1968Gothenburg University,Göteborgs universitet,Institutionen för nationalekonomi med statistik,Department of Economics(Swepub:gu)xnordk (författare)
Göteborgs universitetInstitutionen för nationalekonomi med statistik, Enheten för miljöekonomi (creator_code:org_t)

Av författaren/redakt...: Hammar, Henrik, ...; Jagers, Sverker ...; Nordblom, Katari ...

Om ämnet

SAMHÄLLSVETENSKAP: SAMHÄLLSVETENSKA ...; och Ekonomi och näri ...; och Nationalekonomi

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