Taxes

Tax psychology

The state depends on the tax compliance of citizens to finance public goods such as education or infrastructure. The aim of tax psychological research is to understand the psychological determinants that explain and predict tax compliance of individuals and entrepreneurs. Important determinants are audits and fines, legitimate procedures, fairness, trust or social identity. At the moment, we conduct the following two projects at the Department of Economic and Social Psychology: Tax compliance of the wealthy and tax compliance of groups. In the first project, we examine whether tax compliance determinants differ between wealthy individuals and individuals with an average income. The Panama papers, Paradise papers or the CUM-Ex case indicate that wealthy individuals might have a different perception of the tax system compared to other individuals which in turn might influence their tax compliance behavior. In the second project, we analyze group processes, which might play a role when the tax decision is not taken by one but by several individuals (e.g., two business partners). In both projects, theoretical and empirical work, based on qualitative interviews, survey studies and field and laboratory experiments is conducted. Results should offer practical ideas how to increase honest taxpaying in our society.