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More bang for your buck: tax compliance in the United States and Italy

  • John D’Attoma (a1)

Abstract

I investigate the relationship between perception of public institutions and tax compliance using a large tax compliance laboratory experiment conducted in Italy and the United States. In the first test, I conduct a simple tax compliance game to uncover that given the exact same decisions, contributions to the public good do not differ between Italy and the United States. Second, I ask participants to pay taxes to their national government, pension fund and fire department. In these rounds, behaviours diverge with Italian participants complying significantly less than Americans. Theoretically, I provide evidence demonstrating that how individuals perceive their institutions is a crucial component of the tax compliance decision. Methodologically, I provide a unique experiment, which can help us to better explain crosscountry variation in tax compliance, by asking subjects to make country-specific tax decisions.

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Copyright

Corresponding author

*Corresponding author. Email: j.w.dattoma@exeter.ac.uk

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More bang for your buck: tax compliance in the United States and Italy

  • John D’Attoma (a1)

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