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Testing the “slippery slope framework” among self-employed taxpayers

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Abstract

The “slippery slope framework” suggests voluntary and enforced compliance as the two motivations underlying tax compliance behavior. Using questionnaire data based on a sample of 476 self-employed taxpayers we show that perceptions of procedural and distributive justice predict voluntary compliance, and trust in authorities mediates this observed relation. In addition, the relation between retributive justice, i.e. the perceived fairness with regard to the sanctioning of tax evaders, and enforced compliance was mediated by power, just as the relation between perceived deterrence of authorities’ enforcement strategies and enforced compliance. With regard to both retributive justice and deterrence also a mediational effect of trust on the relation to voluntary compliance was identified. Furthermore, voluntary and enforced compliance were related to perceived social norms, but these relations were neither mediated by trust nor power. Our findings are of particular relevance since the literature identifies self-employed taxpayers as evading considerably more taxes than employees and therefore they are an important audience for interventions to raise tax compliance.

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Notes

  1. To check for robustness, all analyses presented in the following were repeated by dichotomizing the dependent variable through a median split and running logistic regression. Results remain exactly the same.

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Authors and Affiliations

  1. Faculty of Psychology, University of Vienna, Universitaetsstrasse 7, 1010, Vienna, Austria

    Christoph Kogler, Stephan Muehlbacher & Erich Kirchler

Authors
  1. Christoph Kogler
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  2. Stephan Muehlbacher
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  3. Erich Kirchler
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Corresponding author

Correspondence to Christoph Kogler.

Appendix

Appendix

Questionnaire items (translated from German)

Check items

  • Are you obtaining any income from a self-employed occupation?

  • Do you have to pay income tax in Austria?

Trust in authorities

  • The Austrian Tax Office is trustworthy

Power of authorities

  • The Austrian Tax Office has extensive means to force citizens to be honest about tax

Voluntary tax compliance

  • I pay my tax as a matter of course

  • I would also pay my tax if there were no controls

Enforced tax compliance

  • I pay tax because the risk of being checked is too high

  • I feel that I am forced to pay tax

Procedural justice

  • The decision processes and tax audits of the Austrian tax administration...

  • ... are executed fairly

  • ... are always conducted in the same manner

  • ... are arbitrary (reversed)

  • ... are based on facts and not on opinions

  • ... make it easy to appeal against a decision

  • ... in the end serve for the benefit of all

  • ... respect the rights of the citizens

  • I personally have the possibility to discuss my situation with the Austrian Tax Office

  • I personally have a voice in the taxation laws and in tax issues

  • The self-employed have the possibility to discuss their situation with the Austrian Tax Office

  • The self-employed have a voice in the taxation laws and in tax issues

  • The Austrians have the possibility to discuss their situation with the Austrian Tax Office

  • The Austrians have a voice in the taxation laws and in tax issues

  • The employees of the tax administration...

  • ... provide willingly information in case of any questions

  • ... conceal important information (reversed)

  • ... inform taxpayers adequately

  • ... are friendly

  • ... treat taxpayers respectfully

  • ... are trying to put taxpayers off concerning tax issues (reversed)

  • ... deal with administrative decisions in time

  • ... take their time for the requests of the taxpayers

  • ... treat all taxpayers fair

  • ... treat me the same as all the others

  • ... treat me fair

  • ... treat self-employed the same as all the others

  • ... treat self-employed fair

Distributive justice

  • The amount of taxes I have to pay is fair

  • The extent of benefits I get from the state is just compared to others

  • Related to the amount of taxes I have to pay, the state of Austria provides me equivalent benefits in return

  • The possibilities to reduce my tax load are just in comparison to the possibilities of others

  • The amount of taxes self-employed have to pay is fair

  • The extent of benefits self-employed get from the state is just compared to others

  • Related to the amount of taxes self-employed have to pay, the state of Austria provides them equivalent benefits in return

  • The possibilities of self-employed to reduce their tax load are just in comparison to the possibilities of others

  • The Austrian tax system distributes the tax load among all taxpayers in a just way

  • The Austrian state distributes the benefits from tax revenues in a just way

  • Altogether, the relation between benefits from the state and the tax due is just

  • The possibilities to reduce the tax burden are distributed among all taxpayers in a just way

Retributive justice

  • The Austrian legal system guarantees that tax evaders...

  • ... get the penalty they deserve

  • ... are punished appropriately regarding their offense

  • ... have to atone for their act

  • ... get a punishment that affects them

  • ... are not treated too mildly

  • ... are punished rigorously

Social norms

  • In general, self-employed have the opinion that...

  • ... taxes should be paid honestly on the entire income

  • ... smaller incomes can be left out of the tax declaration (reversed)

  • ... loopholes in the tax legislation should be exploited (reversed)

  • ... skilled manual work can be done without a bill (reversed)

  • ... only real expenditures should be mentioned in the tax declaration

  • ... travel expenses for private trips can be stated in the tax declaration (reversed)

  • In general, Austrians have the opinion that...

  • ... taxes should be paid honestly on the entire income

  • ... smaller incomes can be left out of the tax declaration (reversed)

  • ... loopholes in the tax legislation should be exploited (reversed)

  • ... skilled manual work can be done without a bill (reversed)

  • ... only real expenditures should be mentioned in the tax declaration

  • ... travel expenses for private trips can be stated in the tax declaration (reversed)

Deterrence

  • The Austrian tax legislation guarantees that tax evaders...

  • ... are detained from further similar delinquencies

  • ... are deterred from repeating evasion in the future

  • The Austrian tax legislation guarantees that Austrians...

  • ... are detained from evading taxes

  • ... are deterred from evading taxes

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Kogler, C., Muehlbacher, S. & Kirchler, E. Testing the “slippery slope framework” among self-employed taxpayers. Econ Gov 16, 125–142 (2015). https://doi.org/10.1007/s10101-015-0158-9

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  • DOI: https://doi.org/10.1007/s10101-015-0158-9

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