Tax Compliance in a Social Setting: The Influence of Social Norms on Taxpayer Compliance

• In Event: SESSION 2C: Taxation

Abstract

Voluntary tax compliance is important for governments around the world as they try to manage budget deficits. Traditional methods to improve tax compliance, such as increased audits, can be costly to implement. The purpose of this study is to examine the influence that social factors have on individuals’ tax compliance intentions. Results of a survey of 217 U.S. taxpayers found support for the influence of social factors on tax compliance. This research concludes that social norms have an indirect influence on compliance intentions through internalization as personal norms. Specifically, as the strength of social norms in favor of tax compliance increases, personal norms of tax compliance also increase, and this leads to a subsequent increase in compliance intentions. This study adds to current tax research by providing insight into the relationships between social norms, personal norms, and tax compliance. This research also may help taxing authorities develop less costly and more effective strategies for increasing taxpayer compliance.

Author

• Peggy Jimenez, University of North Texas