Publication details

Do Negative News Create Tax Evaders? Evidence from the Tax Compliance Experiment

Title in English Vedou negativní zprávy k daňovým únikům?


Type Appeared in Conference without Proceedings
MU Faculty or unit

Faculty of Economics and Administration Faculty of Social Studies

Description Tax evasion is perceived as one of the biggest problems of public finance. People tend to evade as they do not recognise return in public good provided by the state or local government. The rate of tax compliance might be on the other hand also affected by an external factor such as media who have high power on public opinion and mood of the society We conduct a laboratory experiment to study whether framing of the effectiveness of state spending influences participants´ decision to pay taxes. Using news headlines, subjects get the information on how state institutions are speeding their budget. Our results show that while positive news increases tax compliance comparing to control group, its effect is not statistically significant. On the other hand, negative news significantly increases tax evasion. Our most important finding thus suggests that if people receive signals of the ineffectiveness of state´s spending, their willingness to pay taxes considerably drops.
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