The motivation to comply or not to comply is considerably influenced by beliefs, attitudes, and social representations of taxpayers. These subjective conceptualizations and evaluations are often not objective or true, but they determine how citizens construct their subjective reality. Attitudes, judgments, and behavior intentions eventually shape people’s behavior which is often more affected by what they think than by what actually is. We first explain what social representations are, how they are related to individual attitudes, and to what extent (...) both social representations and attitudes shape behavior according to the existing psychological literature. In the following section we present three of our own studies on taxpayers’ social representations of taxes and their attitudes towards tax evasion and tax avoidance. These empirical studies identify relevant differences in attitudes between different occupation groups: Self-employed entrepreneurs express less favorable views on taxes and the tax authorities and as a result feel more restricted and hindered in their work, while employed workers focus stronger on the exchange function between tax payments and the resulting provision of public goods. Despite the differences, in all occupation groups tax evasion is not perceived as a severe crime and tax evaders are even judged quite positively and as more intelligent than the typical tax payer. The most recent study suggests that tax evasion might not be evaluated as positive anymore as in earlier studies, but instead tax avoidance seems to be morally accepted and taxpayers engaging in tax avoidance are judged more positive than the typical taxpayer. (shrink)

This study is the first to examine the relationships among Machiavellianism, social norms and taxpayer intentions to fraudulently overstate their deductions. We theorize and empirically document that high Machiavellian taxpayers report significantly less ethical social norms, suggesting that reported social norms are influenced by cognitive biases such as social projection and Machiavellian cynicism; reported social norms are, in general, significantly associated with tax evasion intentions; social norms partially mediate the relationship between Machiavellianism and evasion intentions. Our findings imply that (...) experimental research that controls for key personality traits such as Machiavellianism will be necessary to test the effectiveness of potential interventions designed to enhance social norms and tax compliance. Our findings also raise questions regarding the validity of certain social norm measures used in recent studies, particularly in the case of high Machiavellians. In contrast to much prior research, gender was not associated with the likelihood of committing tax fraud in our multivariate models, suggesting that the higher levels of tax compliance often associated with females may be eroding. (shrink)

This paper examines Australian taxpayers' perceptions of their idealized tax practitioner as well as their perceptions of their current tax preparer. The analysis was based on survey responses from 2,040 randomly selected Australian taxpayers who completed the "Community Hopes, Fears and Actions Survey" (author, 2000). Three dimensions were identified as underlying taxpayer judgements of their idealized practitioner. A minority of the sample indicated that their ideal was a creative, aggressive tax planning type, a person who was well networked (...) and familiar with tax office intelligence and enforcement priorities. A second type of idealized practitioner engaged in the cautious minimisation of tax. Unlike creative accountants, practitioners of this type avoided conflict, while being sophisticated about identifying opportunities to minimise tax. The most popular idealized type was the low risk, no fuss practitioner who was honest and risk averse. The data revealed that taxpayers are likely to find tax practitioners who have the attributes that they value most highly, but that when taxpayers' perceptions of their tax practitioner are combined with their ideals, only two substantive dimensions emerge, tax avoidance and doing the right thing. Our inability to distinguish tax practitioners who are seen to provide cautious and aggressive advice in practice has important implications for the growth of aggressive tax planning markets in the community. (shrink)

We examine whether a taxpayer’s decision to choose a taxpayer-favorable (vs. a taxpayer-unfavorable) characterization of income is associated with contextual and individual dimensions of that decision. Using a 2 × 2 factorial experimental design, we manipulate the prevailing social norm on whether there is a general belief that a specific form of income should be characterized as a capital gain (taxed at a lower tax rate and hence taxpayer favorable) or as ordinary income (taxed at a higher tax rate and (...) hence taxpayer unfavorable), and the group affiliation on whether the individual is making a tax characterization decision as a sole proprietor or as a member of a group practice. Moreover, we measure participants’ fairness perception of characterizing the income as capital gains versus ordinary. We study the decisions of 180 graduate business and accounting students from two US business schools to explore these dimensions using a tax-ambiguous income situation. Results indicate that both contextual and individual dimensions impact taxpayer decisions. Specifically, the social norm and fairness perception of characterizing income as capital gains affects the likelihood of choosing such a characterization. Being a sole proprietor or a member of a group practice does not have any significant main effect. However, relative to all other conditions, taxpayers are most likely to characterize income as capital gains when both the social norms are for capital gains characterization and when the taxpayer is a member of a group practice. Results remain largely robust to a variety of alternative explanations. We conclude the paper with a discussion of our findings and their implications for tax policy, enforcement, and research. (shrink)

The issue how to reduce of tax evasion is widely discussed in the literature. A public authority may affect the behavior of taxpayers, not only through economic factors, but also by strengthen fiscal discipline. In this process especially role play such issues as tax morale, tax mentality and perceived tax justice. The purpose of the study was to identify groups of taxpayers with similar attitudes towards taxes and similar tax behaviors. Cluster analysis elicited four types of tax payers: (...) Intrinsic Tax Payer, External Tax Payer, Intrinsic Tax Evader, External Tax Evader. In the study the most common were the first two types of taxpayers. Elicited types correspond with motivational tax postures identified by Braithwaite and Torgler. The conclusions sum up the key issues discussed, policy implications and the limitation of the analysis. (shrink)

We examine whether a taxpayer’s decision to choose a taxpayer-favorable characterization of income is associated with contextual and individual dimensions of that decision. Using a 2 × 2 factorial experimental design, we manipulate the prevailing social norm on whether there is a general belief that a specific form of income should be characterized as a capital gain or as ordinary income, and the group affiliation on whether the individual is making a tax characterization decision as a sole proprietor or as (...) a member of a group practice. Moreover, we measure participants’ fairness perception of characterizing the income as capital gains versus ordinary. We study the decisions of 180 graduate business and accounting students from two US business schools to explore these dimensions using a tax-ambiguous income situation. Results indicate that both contextual and individual dimensions impact taxpayer decisions. Specifically, the social norm and fairness perception of characterizing income as capital gains affects the likelihood of choosing such a characterization. Being a sole proprietor or a member of a group practice does not have any significant main effect. However, relative to all other conditions, taxpayers are most likely to characterize income as capital gains when both the social norms are for capital gains characterization and when the taxpayer is a member of a group practice. Results remain largely robust to a variety of alternative explanations. We conclude the paper with a discussion of our findings and their implications for tax policy, enforcement, and research. (shrink)

Although the role of fairness in tax compliance has been of increasing interest among the academic and professional tax communities, very little is known about the role of interactional fairness. Interactional fairness refers to the quality of the treatment provided to individuals from authority figures, such as tax authority representatives. We conduct an experiment using US taxpayers to examine the role of interactional fairness on tax compliance intentions, and how detection influences this relation. Taxpayers’ detection salience reflects their (...) perceptions that they will be audited by the tax authority. Using insights from conditional cooperation theory, we predict and find that detection moderates the relation between interactional fairness and tax compliance intentions, such that the effect of interactional fairness on tax compliance intentions diminishes with higher detection. We discuss the implications of our results for tax policy. (shrink)

Although the role of fairness in tax compliance has been of increasing interest among the academic and professional tax communities, very little is known about the role of interactional fairness. Interactional fairness refers to the quality of the treatment provided to individuals from authority figures, such as tax authority representatives. We conduct an experiment using US taxpayers to examine the role of interactional fairness on tax compliance intentions, and how detection influences this relation. Taxpayers’ detection salience reflects their (...) perceptions that they will be audited by the tax authority. Using insights from conditional cooperation theory, we predict and find that detection moderates the relation between interactional fairness and tax compliance intentions, such that the effect of interactional fairness on tax compliance intentions diminishes with higher detection. We discuss the implications of our results for tax policy. (shrink)

Guilt is a powerful emotion that is known to influence ethical decision-making. Nevertheless, the role of guilt cognitions in influencing restorative behaviour following an unethical action is not well understood. Guilt cognitions are interrelated beliefs about an individual’s role in a negative event. We experimentally investigate the joint impact of three guilt cognitions—responsibility for a decision, justification for a decision, and foreseeability of consequences—on a taxpayer’s decision to make a tax amnesty disclosure. Tax amnesties encourage delinquent taxpayers to self-correct (...) to avoid severe penalties that would result if their tax evasion were discovered. Our findings suggest a three-way interaction effect such that taxpayers are likely to make tax amnesty disclosures when they foresee that they will be caught by the tax authority, unless they can diffuse responsibility for their evasion and justify their evasion. Implications for tax policy and tax professionals are discussed. (shrink)

This study used a laboratory experiment with monetary incentives to test the impact of three personal factors (moral reasoning, value orientation and risk preference), and three situational factors (the presence/absence of audits, tax inequity, and peer reporting behavior), while controlling for the impact of other demographic characteristics, on tax compliance. Analysis of Covariance (ANCOVA) reveals that all the main effects analyzed are statistically significant and robustly influence tax compliance behavior. These results highlight the importance of obtaining a proper understanding of (...) these factors for developing effective policies for increasing the level of compliance, and indicate that standard enforcement polices based on punishment alone should be supplemented by an information system that would acquaint tax payers with the compliance level of other tax payers; reinforce the concept of fairness of the tax system among tax payers; and develop programs that enhance and appeal to a taxpayer's moral conscience and reinforce social cohesion. (shrink)

The objective of the paper is to present the significance of general rules of tax law resulting from the new draft tax ordinance for the taxpayer’s situation. The aim of this paper is to present a general overview of the newly introduced rules of tax law. This study may be the basis for further studies in the field of subject principles. The analysis covered the rules referring to: support of the taxpayer in fulfilling tax obligations, actions of tax authorities in (...) a way that inspires taxpayer’s trust, equal treatment of taxpayers, presumption of the taxpayer’s honesty, not abandoning the established practice of resolving cases in the same factual and legal state. Within the framework of this paper, research hypotheses concerning the impact of these rules on the legal situation of the taxpayer have been positively verified. These rules will have an impact on the improvement of the taxpayer’s situation, which has to face the complicated legal environment. This environment forms the complex tax law system, as well as the intricate and complicated language used by the legislator in making tax law regulations in Poland. This confirms the need to introduce changes resulting from the new draft tax ordinance. (shrink)

We present an analysis of over 400 comments about complying with tax obligations extracted from online discussion forums for freelancers. While the topics investigated by much of the literature on taxpayer behaviour are theory driven, we aimed to explore the universe of online discussions about tax in order to extract those topics that are most relevant to taxpayers. The forum discussions were subjected to a qualitative thematic analysis, and we present a model of the ‘universe’ of tax as reflected (...) in taxpayer discussions. The model comprises several main actors and describes the multiple ways in which they relate to taxpayers’ behaviour. We also conduct a more focused analysis to show that the majority of taxpayers seem unconcerned with many of the variables that have been the focus of tax behaviour research, and that most people are motivated to be compliant and are more concerned with how to comply than whether to comply. Moreover, we discuss how these ‘real-world’ tax discussions question common assumptions in the study of tax behaviour and how they inform our understanding of business ethics more generally. (shrink)

The relationship between tax authorities and taxpayers is essential for tax compliance. The aim of the present paper was to explore systematically the determinants of this relationship and related tax compliance behaviors based on the extended slippery slope framework. We used in-depth qualitative interviews with 33 self-employed taxpayers and 30 tax auditors. Interviewees described the tax relationship along the extended slippery slope framework concepts of power and trust. However, also novel sub-categories of power (e.g., setting deadlines) and trust (...) (e.g., personal assistance) were mentioned. Furthermore, also little-studied categories of tax behavior emerged, such as accepting tax behavior e.g., being available to the tax authorities, or stalling tax behavior e.g., the intentional creation of complexity. The results comprehensively summarize the determinants of the tax relationship and tax compliance behaviors. Additionally, results highlight future research possibilities and illustrate policy interventions. (shrink)

This article refers to the issues associated with the crucial significance of the interpretation of tax law provisions made by administrative courts in the course of the judicial inspection of tax decisions, within the context of protecting the subjective rights of taxpayers. The analysis in that regard has been prepared based on the provisions of art. 153 of the Act of 25 July 2002 on Proceedings before Administrative Courts, which expresses the important rule of binding the court and the (...) administrative authority, whose act was the subject of an appeal, with a legal assessment and instructions regarding the further proceedings described in the decision of the administrative court. As a result of this rule, a decision of an administrative court exerts the results exceeding the scope of judicial administrative proceedings, while its effect also covers the future tax proceedings. If the legal assessment made by the court refers to the regulations that affect the subjective rights of a taxpayer, it means that the administrative court imposes the effects of “its” interpretation of those provisions on a tax authority. In turn, the tax authority is obliged to respect those rights in accordance with the opinions of the court, which usually affects the final resolution of a tax case. It should be borne in mind that a taxpayer, by submitting an appeal against a tax decision to an administrative court, demands not only an inspection of the acts of tax administration, but also - which should be emphasized - demands the execution of its rights, including its subjective rights. Therefore, we should not forget the crucial role of the administrative courts in the protection of the substantive rights of taxpayers. The instrument that allows the administrative courts to guard the subjective rights of taxpayers, consists in the procedural regulations included in the provisions on proceedings before administrative courts, and in particular art. 153 of the Act on Proceedings before Administrative Courts in Poland. (shrink)

The principle of absolute sovereignty may have been consigned to history, but a strong presumption against foreign intervention seems to have been left in its stead. On the dominant view, only massacre and ethnic cleansing justify armed intervention, these harms must be already occurring or imminent, and the prudential constraints on war must be satisfied. Each of these conditions has recently come under pressure. Those looking to defend the dominant view have typically done so by invoking international peace and stability, (...) or the value of communal self-determination. But the internal aspect of legitimacy has been overlooked in all of this. If a government insists on defending the human rights of foreigners, it must also be sure not to violate the rights of its own citizens in the process. I argue that the current presumption against humanitarian intervention cannot be substantially relaxed for internal reasons, or given the obligations that states owe to their own constituents. (shrink)

Since taking office, the President of the United States has consistently refused to make his tax returns available for public scrutiny. In so doing, he has broken with presidential tradition and kept people guessing about what his tax returns would show if they were disclosed. Interestingly enough, in the absence of concrete knowledge about the President’s tax circumstances, some taxpayers perceive that he did not pay his fair share and others perceive that he did. This situation presents an opportunity (...) for us to consider how vertical equity perceptions about the President’s fair share of taxes, and identification with the President via voting behavior, are jointly associated with taxpayers’ compliance. Using insights from equity theory as reported in Adams Advances in experimental social psychology, Academic Press, New York, 1965) and social learning theory as reported in Bandura, we anticipate and find that those taxpayers who perceive that the President did not pay his fair share of taxes and who most closely socially identify with him have the lowest tax compliance. We use a survey of 600 American taxpayers to capture their perceptions of vertical equity, voting behavior, and tax compliance intentions. Our results may reflect that taxpayers who identify with the President will tend to model his tax-related actions, or may also indicate that some taxpayers vote for a president whose actions are similar to their own. Insights and implications for ethics and tax researchers and tax policy makers are discussed. (shrink)

How should educational research be contracted? And is there anything wrong with the way that public funding of educational research is currently administered? We endeavour to answer these questions by appeal to the work of two of the most prominent philosophers of science of the twentieth century, namely Popper and Kuhn. Although their normative views of science are radically different, we show that they would nonetheless agree on a number of key rules concerning the extent to which scientific practice should (...) be influenced ‘from the outside’. We then show that these rules are often broken in the way that research is publicly funded in the UK. (shrink)

How should educational research be contracted? And is there anything wrong with the way that public funding of educational research is currently administered? We endeavour to answer these questions by appeal to the work of two of the most prominent philosophers of science of the twentieth century, namely Popper and Kuhn. Although their normative views of science are radically different, we show that they would nonetheless agree on a number of key rules concerning the extent to which scientific practice should (...) be influenced ‘from the outside’. We then show that these rules are often broken in the way that research is publicly funded in the UK. (shrink)

The purpose of this study is to explore with more rigor and detail the role of social norms in tax compliance. This study draws on Cialdini and Trost’s (The Handbook of Social Psychology: Oxford University Press, Boston, MA, 1998) taxonomy of social norms to investigate with more specificity this potentially decisive (Alm and McKee, Managerial and Decision Economics, 19:259–275, 1998) influence on tax compliance. We test our research hypotheses regarding the direct and indirect influences of social norms using a hypothetical (...) compliance scenario with 174 experienced taxpayers as participants. Factor analysis of the social norm questions successfully identified four distinct social norm constructs, in line with Cialdini and Trost (1998). Results of the path analysis show that individuals’ standards for behavior/ethical beliefs (personal norms) as well as the expectations of close others (subjective norms) directly influence tax compliance decisions, whereas general societal expectations (injunctive norms) and other individuals’ actual behavior (descriptive norms) have an indirect influence. This shows that social norms have important direct as well as indirect influences on tax compliance behavior. We also investigate a number of attitudinal variables that may be related to social norms and taxpayer compliance. The results of this study further clarify the important role that social norms have with regard to taxpayers’ compliance behavior. (shrink)

This chapter examines the nature and normative significance of taxation. In particular, it identifies and explores two central normative questions: (1) What tax arrangements should a state or society put into place? (2) How should a citizen or taxpayer relate to an existing system? In thinking through these and relate questions, the discussion also critically engages with the broadly Rawlsian view of taxation defended by Murphy and Nagel in The Myth of Ownership.

To build a relationship between Tax Administration and taxpayers based on trust, law science must provide the necessary information related to policies or institutions but also inform taxpayers about their rights and obligations. This information must be known but, above all, understood.The objective is to introduce a paradigm shift in the way legal studies are approached through Legal Design thinking techniques. Specifically, starting from the need for the jurist to study the law, collaborating with other disciplines to design (...) mechanisms that allow the communication of complex information that helps both the understanding of the law and decision-making process. (shrink)

American taxpayers spend $30 billion annually funding biomedical research. By some estimates, half of the results from these studies can't be replicated elsewhere-the science is simply wrong. Often, research institutes and academia emphasize publishing results over getting the right answers, incentivizing poor experimental design, improper methods, and sloppy statistics. Bad science doesn't just hold back medical progress, it can sign the equivalent of a death sentence. How are those with breast cancer helped when the cell on which 900 papers (...) are based turns out not to be a breast cancer cell at all? How effective could a new treatment for ALS be when it failed to cure even the mice it was initially tested on? In Rigor Mortis, award-winning science journalist Richard F. Harris reveals these urgent issues with vivid anecdotes, personal stories, and interviews with the nation's top biomedical researchers. We need to fix our dysfunctional biomedical system-now. (shrink)

Prior research shows taxpayers’ perceptions of fairness leads to greater cooperation and compliance with tax authorities. Yet our understanding of tax fairness has been hampered by its general reliance upon models and measures of fairness developed by organizational fairness research, even though fairness is a perception subject to contextual influences. Accordingly, we attempt to gain insight into the influence of contextual factors on fairness through the development of a theoretically based and empirically derived model of tax fairness, grounded in (...) organizational literature, but empirically tested in the tax context. Our analysis shows the extent to which items and dimensions found in the organizational fairness literature reflect taxpayers’ perceptions of tax fairness. Most importantly, our findings contribute to fairness research by identifying the role of relevant comparison groups in affecting perceptions of fairness, and thereby extends our understanding of the role of context in affecting fairness perceptions. Furthermore, by identifying the dimensions and items incorporated in perceptions of tax fairness, our study provides a foundation for tax researchers and policy makers to determine how best to promote voluntary taxpayers’ compliance and in so doing, mitigate tax avoidance and tax evasion. (shrink)

This study examines how taxpayer support for government spending can improve tax compliance. While there is ample evidence on the deterrent effect of audit probability on taxpayer noncompliance, there is no evidence related to the moderating role that taxpayer support may have on compliance behavior. We also examine the moderating role that taxpayer ethics plays in compliance decisions. Results of our study indicate that the level of taxpayer support influences taxpayer compliance decisions, in that those with greater support for how (...) tax dollars are spent report higher amounts of taxable income. In addition, we find that audit probability influences taxpayer compliance decisions when there is support for the government’s use of tax dollars for non-welfare programs, such as defense. However, for welfare programs, such as healthcare, taxpayer support leads to increased compliance regardless of audit rate. When taxpayers do not support government programs, their compliance is lower regardless of the audit probability. This highlights the importance of gaining taxpayer support for government programs and indicates that attempts to align the interests of taxpayers with those of the government may increase voluntary compliance among taxpayers. Finally, we find that taxpayer ethics influences compliance such that, for individuals who have lower ethical standards, a high audit rate as well as support for a program may be necessary to improve compliance behavior. Theoretical and practical implications of these findings are discussed. (shrink)

Marie Oldfield, Pro Bono Economics & Refugee Council. Over half the total applications for asylum the UK receives each year are initially rejected, yet nearly a third of these initial rejections are subsequently overturned on appeal. This process that fails to get decisions right first time imposes significant costs, not just on the applicants themselves, but also more widely on UK taxpayers. Asylum seekers are not entitled to welfare benefits nor employment except in some limited cases, and are often (...) placed in unsuitable conditions with lack of appropriate support to prepare their case for asylum. These unfortunate circumstances mean that they are unable to gather and present all the required evidence first time, even when the case for asylum is legitimate. As a result, the application is rejected and thus begins a cycle of appeals that might eventually lead to a successful outcome for the asylum seeker but will, in the process, burden the taxpayer with unnecessary administrative cost and cause the asylum seeker needless distress and prevent them from accessing suitable economic opportunities. • Our study estimates that there are approximately 4,000 initial rejections that are successfully appealed each year and, with each appeal incurring direct administrative costs of around £1,000, the price tag of incorrect initial decisions adds up to a hefty £4 million per year in unnecessary administrative costs alone. • There are other costs, too, that negatively impact asylum seekers and taxpayers, albeit in a more indirect manner. The longer the appeals process is dragged out, the more delay there is to successful asylum seekers entering the labour market which means lost economic activity and forgone tax revenue for the Exchequer. Long periods of unemployment also result in skills attrition and lower the probability of the asylum seeker successfully entering the labour market in the future. • A lengthy appeals process heightens stress and worsens mental health in asylum seekers, a group arguably already more vulnerable on this front. Unnecessary human suffering aside, there is also a monetary cost borne by the taxpayer should NHS mental health services become involved. Thus, there is a pressing and viable case for providing asylum seekers a stable environment in which to complete their applications for asylum. This would increase the likelihood of reaching correct decisions in the first instance, avoid unnecessary administrative costs of an arduous appeals process, enable successful asylum seekers to access the labour market and contribute to the Exchequer, and avoid placing extra demands on already strained NHS mental health services. (shrink)

In this article we argue that puzzle of tax compliance can be explained, at least in part, by recognizing the typically neglected role of ethics in individual behavior; that is, individuals do not always behave as the selfish, rational, self-interested individuals portrayed in the standard neoclassical paradigm, but rather are often motivated by many other factors that have as their main foundation some aspects of “ethics.” We argue that it is not possible to understand fully an individual’s compliance decisions without (...) considering in some form these ethical dimensions. Specifically, we argue here that there is much direct and indirect evidence that ethics differ across individuals and that these differences matter in significant ways for their compliance decisions. We then put this in the larger context of the inability of the standard neoclassical paradigm to explain compliance of at least some individuals, and we suggest several possible avenues by which theory can be expanded to incorporate ethics. We conclude by arguing that a full house of compliance strategies is needed to combat tax evasion, strategies that include the traditional “enforcement” paradigm suggested by and consistent with neoclassical theory, a less traditional “service” paradigm that recognizes the important role of a “kinder and gentler” tax administration in encouraging compliance, and, importantly, a new “trust” paradigm that is built on the foundation of ethics, in which the tax administration must recognize that it can erode the ethics of taxpayers by its own decisions. (shrink)

Selected as a Financial Times Best Book of 2013Governments today in both Europe and the United States have succeeded in casting government spending as reckless wastefulness that has made the economy worse. In contrast, they have advanced a policy of draconian budget cuts--austerity--to solve the financial crisis. We are told that we have all lived beyond our means and now need to tighten our belts. This view conveniently forgets where all that debt came from. Not from an orgy of government (...) spending, but as the direct result of bailing out, recapitalizing, and adding liquidity to the broken banking system. Through these actions private debt was rechristened as government debt while those responsible for generating it walked away scot free, placing the blame on the state, and the burden on the taxpayer. That burden now takes the form of a global turn to austerity, the policy of reducing domestic wages and prices to restore competitiveness and balance the budget. The problem, according to political economist Mark Blyth, is that austerity is a very dangerous idea. First of all, it doesn't work. As the past four years and countless historical examples from the last 100 years show, while it makes sense for any one state to try and cut its way to growth, it simply cannot work when all states try it simultaneously: all we do is shrink the economy. In the worst case, austerity policies worsened the Great Depression and created the conditions for seizures of power by the forces responsible for the Second World War: the Nazis and the Japanese military establishment. As Blyth amply demonstrates, the arguments for austerity are tenuous and the evidence thin. Rather than expanding growth and opportunity, the repeated revival of this dead economic idea has almost always led to low growth along with increases in wealth and income inequality. Austerity demolishes the conventional wisdom, marshaling an army of facts to demand that we austerity for what it is, and what it costs us. (shrink)

The proliferation of public–private partnerships for development as an answer to many public challenges calls for careful evaluation. To this end, tailored frameworks are fundamental for helping understand the PPPs’ impact and for guiding corrective adjustment. Scholars have developed frameworks focusing on the partners’ relationships, the order of effects, and the distinction between outputs and outcomes. To capture a PPP’s complexity and multiple linkages with its environment, we argue that a thorough evaluation should adopt a stakeholder-oriented approach and consider the (...) costs and benefits that a PPP implies for them—especially as taxpayers’ money is involved. For this purpose, we build on a stakeholder-oriented evaluation framework from the nonprofit business partnership literature. In line with our broad evaluation conception, we extend it with the manifold ripple effects that PPPs for development have and include the time dimension for the links between different PPP stages and related outcomes to become clearer. Applying this framework to an illustrative case, we highlight important direct and especially indirect stakeholder outcomes, which a narrow evaluation would omit, point to the challenges involved in the evaluation endeavor, and identify interesting future research areas. (shrink)

The main goal of publicly funded biomedical research is to generate social value through the creation and application of knowledge that can improve the well-being of current and future people. Prioritising research with the greatest potential social value is crucial for good stewardship of limited public resources and ensuring ethical involvement of research participants. At the National Institutes of Health (NIH), peer reviewers hold the expertise and responsibility for social value assessment and resulting prioritisation at the project level. However, previous (...) research has shown that peer reviewers place more emphasis on a study’s methods (‘Approach’) than on its potential social value (best approximated by the criterion of ‘Significance’). Lower weighting of Significance may be due to reviewers’ views on the relative importance of social value, their belief that social value is evaluated at other stages of the research priority-setting process or the lack of guidance on how to approach the challenging task of assessing expected social value. The NIH is currently revising its review criteria and how these criteria contribute to overall scores. To elevate the role of social value in priority setting, the agency should support empirical research on how peer reviewers approach the assessment of social value, provide more specific guidance for reviewing social value and experiment with alternative reviewer assignment strategies. These recommendations would help ensure that funding priorities align with the NIH’s mission and the obligation of taxpayer-funded research to contribute to the public good. (shrink)

How can head teachers live up to expectations? What makes them fail? What keeps the profession in good standing in the taxpayer's eye, and what undermines it? This book sets out a new vision for school leadership, moving beyond leadership styles and best practice to reflect on the intrinsic motivation in becoming a leader within a school setting, and proposing a way for the profession to develop and maintain ethical standards. Chapters explore the 2017-18 Commission on Ethical Leadership in Schools, (...) considering the core principles and behaviours we should expect from our school leaders, and providing a clear, ethical code for thinking about and reinforcing ethical standards in schools. (shrink)

From 2010 to 2020, Indonesia’s tax-to-gross domestic product (GDP) ratio has been declining. A tax-to-GDP ratio trend of this magnitude indicates that the tax authority lacks the capacity to collect taxes. The tax administration system’s modernization utilizing information technology is thus deemed necessary. Artificial intelligence (AI) technology may serve as a solution to this issue. Using the theoretical frameworks of innovations in tax compliance, the cost of taxation, success factors for information technology governance (SFITG), and AI readiness, this study aims (...) to analyze the costs and benefits, the enablers and inhibitors, and the readiness of the government and related parties to apply AI to modernize the tax administration system in Indonesia. This study used qualitative approaches for the data’s collection and analysis. The data were obtained through a literature study and in-depth interviews. The findings show that AI application in the field of taxation can assist tax authorities in enforcing the law, provide taxpayers with convenience in fulfilling their tax obligations, improve justice for all taxpayers, and reduce tax compliance costs. The openness of Indonesia to technological developments, as evidenced by the AI National Strategy, is a supporting factor in the application of AI in Indonesia, particularly for the modernization of the tax administration system. The absence of specific regulations governing AI adoption, as well as a lack of human resources that can help the tax administration process, data, and infrastructure already support, are the impediments to implementing AI for the modernization of the tax administration system in Indonesia. (shrink)

A critical but underdeveloped part of the libertarian debate about immigration is the question of who, if anyone, owns public property, and the consequences of the answer to this question. Libertarians who favor restrictive immigration policies, such as Hans-Hermann Hoppe, argue that taxpayers own public property, and that the state, while it is in control of such property, should manage it on behalf of taxpayers in the same way private owners would manage their own property. In other words, (...) it should be quite selective about who may enter. Walter Block, who takes an “open borders” position, does not appear to dispute the claim that taxpayers own public property, but nevertheless argues that immigrants are entitled to ignore the state’s control of, and thus may freely enter, such property. In this article I explore the question of public property ownership using Rothbardian property rights principles. I conclude that, at least with respect to a particular type of public property, neither Hoppe’s nor Block’s reasoning is consistent with these principles. I also consider the idea that the state ought to have a role in managing public property in light of some libertarian anarchist ideas about the state. I conclude that supporting a legitimate role for the state as an immigration gatekeeper is inconsistent with Rothbardian and Hoppean libertarian anarchism, as well as with the associated strategy of advocating always and in every instance reductions in the state’s role in society. (shrink)

Individuals who become ill as a result of personal lifestyle choices often shift the monetary costs of their healthcare needs to the taxpaying public or to fellow members of a private insurance pool. Some argue that policies permitting such cost shifting are unfair. Arguments for this view may seem to draw support from luck egalitarian accounts of distributive justice. This essay argues that the luck egalitarian framework provides no such support. To allocate healthcare costs on the basis of personal responsibility (...) would arbitrarily and publicly burden socially detectable risk-takers while undetectable risk-takers continue to get a free ride. That problem is unavoidable even on the assumption that distributive institutions outside the healthcare sector are fully just. In actual, farfrom-just societies, imposing personal liability for the costs of voluntary risk taking would be wrong for an additional reason. Doing so would tend to magnify existing distributive injustices. These conclusions draw attention to two common ‘moral fallacies of the second best’ that can arise when applying ideal normative theory to matters of institutional design and in real-world policy contexts. (shrink)

This is the conundrum that gives rise to the issue of tax avoidance: Although governments always seem to lack sufficient funds to support the needs of society, tax codes are often written that offer “a way out” of paying taxes for some but not all constituents. The ways out are referred to as loopholes that allow taxpayers to avoid taxes. This paper first defines the basic terms of tax avoidance and tax evasion and then offers an ethical review of (...) the morality of aggressive tax avoidance. Aggressive tax avoidance is then addressed in relationship a corporate entity’s tone at the top. The conclusion is drawn that use of the letter of the law to avoid payment of taxes sorely needed by governments for the good faith provision of public goods and services is ethically unacceptable. Several suggestions for change are provided, including a new financial statement disclosure and the possibility of a published corporate ethics report. (shrink)

Insurance claim fraud costs insurance companies, policymakers, and taxpayers billions of dollars every year and has been described as the second largest white collar crime. The most common insurance fraud activity and one that contributes a significant portion of dollar losses is the practice of padding claim amounts in the event of a loss. One of the largest issues insurance companies face is that policyholders often do not perceive insurance claim padding as an unethical behavior. However, very little research (...) has examined the factors that contribute to such perceptions. Considering how consumers often attempt to justify fraudulent behavior from a fairness perspective, the present work examines how the amount of the deductible in an insurance claim situation can influence feelings of fairness and ethicality. The results of an experimental study show that higher deductible amounts result in stronger perceptions that insurance claim padding is fair to the insurance company, weaker perceptions that the behavior is unethical, and higher proposed claim award amounts. The study also shows, however, that the deductible amount effects are attenuated for consumers who display higher ethical standards as reflected by their scores on the consumer ethics scale. Implications are discussed with respect to the insurance industry, deviant consumer behavior, and general business ethics theory. (shrink)

An “optional war” is a war that a state is permitted but not required to wage. Are there any such wars? This article assesses the two most promising arguments for optional war. (1) Permissible humanitarian wars can be so costly for soldiers and taxpayers that states are not be required them. (2) Wars of national self-defense can be discretionary: states can sometimes choose whether or not to defend themselves. The article refutes both arguments. Pace (1), states should not wage (...) wars when the costs of doing so are overly burdensome. Pace (2), states are required to resist aggression whenever they are morally permitted to do so. (shrink)

Tax compliance is a concern to governments around the world. Prior research (Alm, J. and I. Sanchez: 1995, KYKLOS 48, 3–19) has attributed unexplained inter-country differences in compliance rates to differences in social norms. Economics researchers studying tax compliance in the United States (U.S.) (see for example J. Andreoni et al.: 1998, Journal of Economic Literature 36, 818–860) have called for more attention to social (as opposed to economic) influences on tax compliance. In this study, we extend this prior research (...) by explicitly examining the role of social norms [Cialdini, R. and M. Trost: 1998, The Handbook of Social Psychology (Oxford University Press, New York)] on tax compliance in three different countries. We test our research hypotheses using a hypothetical compliance scenario, which was administered in Australia, Singapore, and the U.S. There were differences in compliance rates and social norms among the three countries. Factor analysis of the social norm questions identified three distinct social norm constructs. Two of these factors were significant in explaining tax compliance behavior. The first and most influential factor was taxpayers’ own personal moral beliefs, along with the beliefs of those close to them (e.g., friends and important others). The second significant factor represented societal views of proper behavior. We conclude that social norms help to explain tax compliance intentions and why tax compliance rates are higher than would be predicted by strictly economic models. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:The Office of Scientific IntegrityDavid P. Hamilton (bio)For most of the 1980s, the specter of scientific fraud popped into public view every few years, usually only to submerge again. Faced with several well-publicized cases of scientists who blatantly faked their data—among the best-known being Harvard cardiologist John Darsee (whose colleagues watched him forge data) (Broad and Wade 1982, p. 14) and Sloan-Kettering Institute immunologist William Summerlin (who painted black (...) spots on white mice to simulate tissue grafts) (Broad and Wade 1982, p. 155)—the scientific community as a whole tended to dismiss the phenomenon as the work of a few deviants. Called in 1981 to testify before then-Representative Albert Gore Jr.'s subcommittee on investigations and oversight, Philip Handler, then-president of the National Academy of Sciences, told the panel that science was perfectly capable of regulating itself, and that the problem of scientific fraud had been "grossly exaggerated" by the press (Broad and Wade 1982). The message was clear: Congress should stick to its knitting, and science would take care of itself.Now, however, scientists are faced with a very different situation: a permanent federal bureaucracy, known as the Office of Scientific Integrity (OSI), devoted to the investigation of alleged scientific wrongdoing. The transition from the days of laissez-faire, when universities were entrusted with all investigations unless they were handled so badly that the federal government was forced to take notice, has been an uncomfortable one for many researchers. Lately, this discomfort has taken shape as a vocal protest against OSI. Largely as a result of this protest, federal officials recently promoted a plan to restructure OSI and change some of its operating procedures, a move with unpredictable consequences for universities and researchers alike.OSI was born largely because of investigations by two influential congressmen: Representatives John Dingell of Michigan and Ted Weiss of New York. While both claimed they acted mainly to make sure taxpayer dollars were not spent on fraudulent research, both also maintained a strong interest in protecting "whistleblowers," the often vulnerable, and usually junior, scientists who first raise questions about bad research. And Dingell seemed to take special pleasure in pointing up the deficiencies of investigations run by universities and by the National Institutes of Health (NIH) itself. (For reasons that are not well understood, [End Page 171] biomedical research seems far more prone to fraud than any other field of science. As a result, NIH, which funds most biomedical research in the United States, has held ultimate responsibility for most prominent cases of fraud.) Plagued as they often were by conflicts of interest, shoddy methodologies, and, in some cases, a willingness to believe any excuse by the accused, no matter how far-fetched, these investigations made easy targets. And the notion that science could "govern itself" grew harder to sustain.In late 1988, Dingell and other congressmen began circulating draft bills that would have created a new office for investigating scientific fraud. Dingell would have placed such an office under the aegis of the Inspector General of the Department of Health and Human Services, raising the possibility that scientific fraud might be probed by the same criminal investigators who unravel Medicare fraud. Unsettled by this vision of the "science police," NIH officials moved quickly to pre-empt Congress. On March 16, 1989, they published a notice in the Federal Register announcing the creation of OSI, an office with responsibility for ensuring thorough university investigations of misconduct and the authority to conduct its own investigations when necessary.From the beginning, OSI took an unusual approach to its work. For one thing, the office had a broad mandate: Although located within NIH, it was responsible for research funded throughout the entire Public Health Service, including the Food and Drug Administration, the Alcohol, Drug, and Mental Health Administration, and the Centers for Disease Control. Furthermore, it was not restricted to scientific fraud. Departmental lawyers, wishing to avoid the legal connotations of the term "fraud"—in particular, a requirement that fraudulent actions not only mislead others but also cause them noticeable harm—decided instead to adopt the term "scientific misconduct," defined as "fabrication, falsification, plagiarism, or other practices that deviate... (shrink)

Current debates about the roles of the public and private sectors in pharmaceutical innovation have a long history. The extent to which, and ways in which, the public sector supports drug innovation has implications for assessments of the returns to public research funding, taxpayer rights in drugs, the argument the high prices are needed to support drug innovation, and the desirability of patenting publicly funded research.

Individuals are increasingly switching from hiring tax professionals to prepare their tax returns to self-filing with tax software, yet there is little research about how interacting with tax software influences compliance decisions. Using an experiment, we examine the effect of preparation method, tax software versus tax professional, on willingness to lie. Results from a structural equation model based on data collected from 211 actual taxpayers confirm the hypotheses and show individuals are more willing to lie to tax software than (...) a human tax professional. Our results also suggest this effect is jointly mediated by perceptions of social presence and the perceived detectability of the lie. Beyond the practical implications for tax enforcement, our findings broadly contribute to accounting and other literatures by examining the theoretical mechanisms that explain why individuals interact differently with computers versus humans. We also extend prior research on interactions between humans and computers by examining economically motivated lies. (shrink)

Human consumption of pharmaceuticals often leads to environmental release of residues via urine and faeces, creating environmental and public health risks. Policy responses must consider the normative question how responsibilities for managing such risks, and costs and burdens associated with that management, should be distributed between actors. Recently, the Polluter Pays Principle (PPP) has been advanced as rationale for such distribution. While recognizing some advantages of PPP, we highlight important ethical and practical limitations with applying it in this context: PPP (...) gives ambiguous and arbitrary guidance due to difficulties in identifying the salient polluter. Moreover, when PPP does identify responsible actors, these may be unable to avoid or mitigate their contribution to the pollution, only able to avoid/mitigate it at excessive cost to themselves or others, or excusably ignorant of contributing. These limitations motivate a hybrid framework where PPP, which emphasizes holding those causing large-scale problems accountable, is balanced by the Ability to Pay Principle (APP), which emphasizes efficiently managing such problems. In this framework, improving wastewater treatment and distributing associated financial costs across water consumers or taxpayers stand out as promising responses to pharmaceutical pollution from human use. However, sound policy depends on empirical considerations requiring further study. (shrink)

This essay examines neoconservative criticisms of equity planning, and the challenges against the right of government to regulate local development and land use. The specific concern of this essay is how, or if, local development administrators (equity planners), should use their discretionary powers to ensure that city officials and private developers promote and protect the interests of urban residents, particularly the poor and disadvantaged. The essay begins by discussing the alleged conflict said to exist between needy urban residents and the (...) more secure urban taxpayers. The contrary views of equity planners are then reviewed, and the tensions within the neoconservative arguments are exposed and critiqued. Finally, the dispute between equity planners and neoconservatives is further explored by examining the dispute over the voucher system to address the problem of equal educational opportunity in urban communities. (shrink)

This is the first book to address private equity and health care. It raises the curtain on an industry notorious for its secrecy, exposing the dark side of its maneuvers. The book reveals the dynamics that enable financial engineering and other predatory private equity tactics and the consequences for health care businesses, clients, taxpayers, front-line workers and society at large.

The 2008 global financial crisis raises ethical as much as financial questions. Moral outrage centered on the imbalance between banks profiting from excessive risk-taking in good times and taxpayers suffering the costs in bad times. The paper analyzes this imbalance in terms of ethical theory. It first develops a rights-based framework to answer questions about the moral obligations of states and banks towards each other. It then criticizes standard economic thinking, which de-moralizes the phenomenon of moral hazard. Moral hazard (...) between states and banks arises in a context that cannot be interpreted as normal economic contracting, but should rather be characterized as governed by an implicit social contract giving rise to moral obligations. (shrink)

Thomas Pogge has recently argued that the way in which research and development of essential medicines is incentivized, under existing World Trade Organization rules, should be supplemented with an additional incentivizing mechanism. One might hold a stronger view than the one that Pogge currently holds, namely that patent rights for essential medicines are morally unjustified per se. Throughout this paper, ‘the strong view’ refers to this view. The strong view is one that enjoys considerable support both within and outside the (...) academic community. This paper critically discusses one specific argument in favor of the strong view. This argument is named the ‘Poggean argument’. This denominator is appropriate because a number of the essential premises of the argument are constituted by propositions that Pogge at some point has defended. The Poggean argument is valid, and defenders of the strong view also have some grounds for believing that the argument is sound. This belief comes, however, with what is arguably a too high cost, namely that the global institutional order becomes very demanding on taxpaying citizens of high-income countries if it is to be just. One may find acceptance of this cost relatively unproblematic, but this cost is, it is argued, unacceptable to anyone who has views on distributive justice that are sympathetic to the core tenets of libertarianism. (shrink)

Friendly persuasion, in contrast to deterrent measures like tax audits and penalties on underreported taxes, is a positive and possibly a cost effective method of increasing taxpayer compliance. However, prior studies have failed to show that friendly persuasion has a significant impact on compliance (Blumenthal et al., 2001; McGraw and Scholz, 1991). In our study, in contrast to prior studies, we examine the impact of generating and reading reasons supporting compliance as friendly persuasion on individuals' income reporting behavior as well (...) as control for gender effects. Specifically, we predict an interaction effect between friendly persuasion and gender on compliance behavior. We carried out a 2 (friendly persuasion and control) × 2 (men and women) full factorial experiment, where participants earned $30 by completing two questionnaires. Participants in the friendly persuasion group were required first to generate and second to read a list of reasons why they should comply fully. Afterwards, participants in both groups were asked to report the income they earned and pay tax on the reported income. The results show a significant main effect for gender as well as a significant interaction effect between gender and friendly persuasion on income reported. Women in the friendly persuasion group reported significantly higher income compared to men in that group. Other comparisons were not significant. Policy implications for increasing taxpayers' ethics and compliance are highlighted. (shrink)

It has been estimated that U.S. companies with global business operations can reduce their U.S. tax bill by up to 10 percentage points if they reincorporate in a zero or low tax offshore jurisdiction. But this activity, at a time of national crisis following the September 11 terrorists' attacks and recent spate of corporate scandals, has received a less than sympathetic response from the U.S. media, ordinary taxpayers, shareholders and politicians as concerns are raised about the reduction of the (...) tax base and the lack of oversight and regulation in offshore centres. Offshore reincorporation has been condemned as immoral, unconscionable, dishonest and unpatriotic, accusations that cast doubt on the legitimacy of the companies concerned. In question is their right to conduct business in the U.S. and in particular, their right to still be viewed as American. Their legitimacy once bestowed so readily by the company's shareholders is now being questioned not only by shareholders but also the media, politicians, government regulators, pension funds and labour unions. Expatriate companies have been slow to respond to questions of their legitimacy, viewing their offshore move as a financial decision needing only the consent of their shareholders. However, times have changed and corporate legitimacy is now in the hands of all the company's stakeholders. Companies will need to explicitly consider the determinants of their legitimacy and the implications of the implied social contract under which they operate, to remain relevant in the days ahead. (shrink)

Libertarians typically object to having the state deal with law and order for several general reasons: it is inefficient; it is carried out at the expense of taxpayers; and it punishes so-called victimless crimes. Exactly what the observance of liberty implies with respect to the treatment of tortfeasors and criminals is more controversial among libertarians. A pure theory of libertarian restitution and retribution is mainly what is attempted here, without becoming involved in general moral anti-state arguments. However, the pure (...) theory alone will raise practical problems that require immediate response if the theory is to appear at all plausible. (shrink)