The slippery slope framework on tax compliance: An attempt to formalization

Author(s)

Prinz A, Stephan Mühlbacher, Erich Kirchler

Abstract

Kirchler, Hoelzl, and Wahl (2008) presented with the so-called 'slippery slope' framework a new approach to understand tax compliance. The slippery slope approach supposes two routes to tax compliance: deterrence of tax evasion by audits and fines on the one hand, and building a trusting relationship with taxpayers by services and support on the other hand. In this paper, the slippery slope framework is formalized by assuming two groups of taxpayers: compliance-minded and evasion-minded persons. Defining reaction functions for persons of both groups with respect to coercive and persuasive power instruments of tax authorities, the typical slippery slope picture emerges that characterises the authorities' work. As a consequence, both groups of policy tools are considered necessary to generate tax compliance. In addition to that, it is shown that coercive and persuasive power may be substitutes or complements to each other, depending of the parameters of the taxpayers' reaction functions. As a further crucial determinant of tax compliance, the behaviour of the fellow citizens with respect to taxpaying is identified.

Organisation(s)

Department of Occupational, Economic and Social Psychology

External organisation(s)

Universität Münster

Journal

Journal of Economic Psychology

Volume

40

Pages

20-34

No. of pages

15

ISSN

0167-4870

DOI

https://doi.org/10.1016/j.joep.2013.04.004

Publication date

02-2014

Peer reviewed

Yes

Austrian Fields of Science 2012

501029 Economic psychology

Keywords

ASJC Scopus subject areas

Economics and Econometrics, Sociology and Political Science, Applied Psychology

Portal url

https://ucrisportal.univie.ac.at/en/publications/29c614f0-c45f-4d41-9972-4869eaf5705c