Katharina Gangl

'How Can I Help You?' Perceived Service Orientation of Tax Authorities and Tax Compliance

Research on tax behavior has recognized the necessity of changing tax authorities’ approach from enforcement to service orientation. However, empirical investigations of the impact of perceived service orientation on tax compliance are scarce. The present study draws conclusions from survey data of representative samples of 807 Dutch private taxpayers and 1377 entrepreneurs. Perceived service orientation was found strongly related to tax compliance. Furthermore, the link between perceived service orientation and tax compliance is mediated by perceived trustworthiness of authorities. We are confident that taxpayers who perceive a greater service orientation will be more willing to contribute their taxes.

Enhancing Tax Compliance Through Coercive and Legitimate Power of Tax Authorities by Concurrently Diminishing or Facilitating Trust in Tax Authorities

Both coercion, such as strict auditing and the use of fines, and legitimate procedures, such as assistance by tax authorities, are often discussed as means of enhancing tax compliance. However, the psychological mechanisms that determine the effectiveness of each strategy are not clear. Although highly relevant, there is rare empirical literature examining the effects of both strategies applied in combination. It is assumed that coercion decreases implicit trust in tax authorities, leading to the perception of a hostile antagonistic tax climate and enforced tax compliance. Conversely, it is suggested that legitimate power increases reason-based trust in the tax authorities, leading to the perception of a service climate and eventually to voluntary cooperation. The combination of both strategies is assumed to cause greater levels of intended compliance than each strategy alone. We conducted two experimental studies with convenience samples of 261 taxpayers overall. The studies describe tax authorities as having low or high coercive power (e.g., imposing lenient or severe sanctions) and/or low or high legitimate power (e.g., having nontransparent or transparent procedures). Data analyses provide supportive evidence for the assumptions regarding the impact on intended tax compliance. Coercive power did not reduce implicit trust in tax authorities; however, it had an effect on reason-based trust, interaction climate, and intended tax compliance if applied solely. When wielded in combination with legitimate power, it had no effect.

Enhancing Tax Compliance Through Coercive and Legitimate Power of Authorities

Strict enforcement and supportive procedures by tax authorities are often discussed as means of enhancing tax compliance. However, it is still not clear how these strategies influence tax compliance. The extended “slippery-slope framework” postulates that coercive power and legitimate power lead to tax compliance, albeit by leading the taxpayer along different motivational paths. The exercising of coercive power reduces citizens’ implicit trust in the authorities and increases the need for enforced compliance and perceptions of an antagonistic climate between tax authorities and taxpayers. Legitimate power is assumed to increase reason-based trust, voluntary cooperation and perceptions of a service climate. Two experimental studies that have manipulated qualities of power either separately or simultaneously have suggested that legitimate power affects intended tax compliance in line with theoretical predictions, whereas the effect of coercive power is less clear.

Patriotism's Impact on Cooperation with the State: An Experimental Study on Tax Compliance

Although it seems reasonable to assume that activating patriotism might motivate citizens to cooperate with the state in reaching societal goals, the empirical evidence supporting this contention is based mostly on correlational rather than experimental studies. In addition, little is known on whether patriotism can be manipulated without simultaneously triggering nationalism and on the psychological processes which determine the patriotism‐cooperation relation. This current article reports results of one survey and three experiments that manipulate patriotism by displaying either a national flag or national landscapes or by priming national achievements. The outcomes indicate that reported and manipulated patriotism indirectly increase tax compliance, although the national flag also increases nationalism. National achievements, on the other hand, seemingly increases trust in national public institutions and the voluntary motivation to cooperate, whereas national landscapes only increase the voluntary motivation to cooperate. Hence, it is possible to increase social capital in the form of trust and cooperation through patriotism without fostering nationalism as well.

Infection with Rhinovirus Facilitates Allergen Penetration Across a Respiratory Epithelial Cell Layer

Background: Rhinovirus infections are a major risk factor for asthma exacerbations. We sought to investigate in an in vitro system whether infection with human rhinovirus reduces the integrity and barrier function of a respiratory epithelial cell layer and thus may influence allergen penetration. Methods: We cultured the human bronchial epithelial cell line 16HBE14o- in a transwell culture system as a surrogate of respiratory epithelium. The cell monolayer was infected with human rhinovirus 14 at 2 different doses. The extent and effects of transepithelial allergen penetration were assessed using transepithelial resistance measurements and a panel of 125I-labeled purified recombinant respiratory allergens (rBet v 1, rBet v 2, and rPhl p 5). Results: Infection of respiratory cell monolayers with human rhinovirus decreased transepithelial resistance and induced a pronounced increase in allergen penetration. Conclusions: Our results indicate that infection with rhinovirus damages the respiratory epithelial barrier and allows allergens to penetrate more efficiently into the subepithelial tissues where they may cause increased allergic inflammation.

Tax Authorities' Interaction with Taxpayers: Compliance by Power and Trust

According to the Slippery Slope Framework (SSF; Kirchler, Hoelzl, and Wahl, 2008), tax compliance depends on power of tax authorities and trust in tax authorities. The framework, however, remains silent on the dynamics between power and trust and how these affect the interaction climate between authorities and taxpayers. The aim of the present paper is to differentiate between coercive and legitimate power and between reason-based and implicit trust in order to clarify the dynamics between power and trust. Insights into these dynamics may be utilized to change the interaction climate from an antagonistic climate into a service or confidence climate.

Does the sole description of a tax authority affect tax evasion?--the impact of described coercive and legitimate power.

Following the classic economic model of tax evasion, taxpayers base their tax decisions on economic determinants, like fine rate and audit probability. Empirical findings on the relationship between economic key determinants and tax evasion are inconsistent and suggest that taxpayers may rather rely on their beliefs about tax authority’s power. Descriptions of the tax authority’s power may affect taxpayers’ beliefs and as such tax evasion. Experiment 1 investigates the impact of fines and beliefs regarding tax authority’s power on tax evasion. Experiments 2-4 are conducted to examine the effect of varying descriptions about a tax authority’s power on participants’ beliefs and respective tax evasion. It is investigated whether tax evasion is influenced by the description of an authority wielding coercive power (Experiment 2), legitimate power (Experiment 3), and coercive and legitimate power combined (Experiment 4). Further, it is examined whether a contrast of the description of power (low to high power; high to low power) impacts tax evasion (Experiments 2-4). Results show that the amount of fine does not impact tax payments, whereas participants’ beliefs regarding tax authority’s power significantly shape compliance decisions. Descriptions of high coercive power as well as high legitimate power affect beliefs about tax authority’s power and positively impact tax honesty. This effect still holds if both qualities of power are applied simultaneously. The contrast of descriptions has little impact on tax evasion. The current study indicates that descriptions of the tax authority, e.g., in information brochures and media reports, have more influence on beliefs and tax payments than information on fine rates. Methodically, these considerations become particularly important when descriptions or vignettes are used besides objective information.

Authorities' Coercive and Legitimate Power: The Impact on Cognitions Underlying Cooperation

The execution of coercive and legitimate power by an authority assures cooperation and prohibits free-riding. While coercive power can be comprised of severe punishment and strict monitoring, legitimate power covers expert, and informative procedures. The perception of these powers wielded by authorities stimulates specific cognitions: trust, relational climates, and motives. With four experiments, the single and combined impact of coercive and legitimate power on these processes and on intended cooperation of n1 = 120, n2 = 130, n3 = 368, and n4 = 102 student participants is investigated within two exemplary contexts (tax contributions, insurance claims). Findings reveal that coercive power increases an antagonistic climate and enforced compliance, whereas legitimate power increases reason-based trust, a service climate, and voluntary cooperation. Unexpectedly, legitimate power is additionally having a negative effect on an antagonistic climate and a positive effect on enforced compliance; these findings lead to a modification of theoretical assumptions. However, solely reason-based trust, but not climate perceptions and motives, mediates the relationship between power and intended cooperation. Implications for theory and practice are discussed.

Coercive and legitimate authority impact tax honesty: evidence from behavioral and ERP experiments

Abstract Cooperation in social systems such as tax honesty is of central importance in our modern societies. However, we know little about cognitive and neural processes driving decisions to evade or pay taxes. This study focuses on the impact of perceived tax authority and examines the mental chronometry mirrored in ERP data allowing a deeper understanding about why humans cooperate in tax systems. We experimentally manipulated coercive and legitimate authority and studied its impact on cooperation and underlying cognitive (experiment 1, 2) and neuronal (experiment 2) processes. Experiment 1 showed that in a condition of coercive authority, tax payments are lower, decisions are faster and participants report more rational reasoning and enforced compliance, however, less voluntary cooperation than in a condition of legitimate authority. Experiment 2 confirmed most results, but did not find a difference in payments or self-reported rational reasoning. Moreover, legitimate authority led to heightened cognitive control (expressed by increased MFN amplitudes) and disrupted attention processing (expressed by decreased P300 amplitudes) compared to coercive authority. To conclude, the neuronal data surprisingly revealed that legitimate authority may led to higher decision conflict and thus to higher cognitive demands in tax decisions than coercive authority.

Steuern: Widerstand und Kooperation

Nach dem Fall von Lehman Brothers in den USA, der weltweit diskutierten Finanz- und nachfolgenden Wirtschaftskrise, ist die Staatsverschuldung zum medialen Dauerbrenner geworden. Um die Verschuldung und Uberschuldung europaischer Staaten zu entscharfen, werden Masnahmen diskutiert, die von ausgabenseitigen Einsparungen bis zur Erhohung bestehender und Einfuhrung neuer Steuerarten reichen (Schlager 2011).