Dissertation
Determinants of Tax Compliance: A Multi-Dimensional Examination of Equity and the Impact of System Justification Theory
Doctor of Philosophy (PhD), Washington State University
01/2014
Handle:
https://hdl.handle.net/2376/108939
Abstract
Across three studies, this research examines determinants of tax compliance. A multi-dimensional model of fairness is introduced, broadening the definition of fairness from one emphasizing distributive justice to a more comprehensive understanding that incorporates the influences of procedural, interactional and informational justices. Structural equation modeling is used to examine survey data from experienced taxpayers. Results demonstrate that each of the four dimensions of fairness is a separate and unique construct. Specifically, procedural and interactional justices should not be collapsed into a single construct as the structural model suggests that these dimensions have significant and opposing relationships with a number of tax compliance variables. Prior studies treating these dimensions as a single construct confound the understanding of the relationship between fairness and tax compliance. This research further indicates that the influences of procedural and interactional justice are as strong or stronger than the associations between facets of distributive justice and tax compliance measures. This result suggests that if the other dimensions of fairness are not controlled, the importance of distributive justice may be overstated.
The multi-dimensional fairness model is further tested with an experiment in which the dimensions of equity are manipulated, and tax compliance intentions are measured. Results support the importance of multiple dimensions of fairness in a tax context. Experimental results indicate that the dimensions of fairness interact as subjects make compliance decisions. Overall, the experiment finds that taxpayers do not always make compliance decisions based solely on distributive justice concerns, and that perceptions of fairness across the other dimensions of equity reduce the focus on fairness of the outcome.
The final study included in this research examines the role of system justification in a tax setting. This theory predicts that perceived dependency upon the tax system will improve compliance. Dependence on the tax system is introduced by describing hypothetical taxpayers as dependent upon tax refunds they receive after qualifying for tax credits and tax deductions. This study specifically examines the interaction between system dependence and audit risk. It finds that under certain conditions, system dependence mitigates the positive relationship between low audit risk and tax evasion.
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Details
- Title
- Determinants of Tax Compliance: A Multi-Dimensional Examination of Equity and the Impact of System Justification Theory
- Creators
- Darcie Marie Costello
- Contributors
- Debra L Sanders (Advisor)Bernard Wong-on-Wing (Committee Member)Craig D Parks (Committee Member)
- Awarding Institution
- Washington State University
- Academic Unit
- Carson College of Business
- Theses and Dissertations
- Doctor of Philosophy (PhD), Washington State University
- Number of pages
- 367
- Identifiers
- 99900581843801842
- Language
- English
- Resource Type
- Dissertation