New Tax Chat! Video -- The Economic Psychology of Tax Behavior with Erich Kirchler
This is just a heads up that we have posted the video of our Tax Chat! discussion with Professor Erich Kirchler on our You Tube channel. This is also a reminder that you can register for our upcoming Tax Chat! on Tuesday, January 12 at noon EST/17:00 GMT/18:00 CET, which will be on Low Income Taxpayer Clinics: An International Movement.
As you may recall, our December Tax Chat! was on the topic of the Economic Psychology of Tax Behavior. Erich developed the Slippery Slope Framework (SSF), which had its beginnings in the insight that neither economics nor psychology tells the entire story of tax compliance behavior. The SSF posits a multi-dimensional framework that combines the traditional economic focus on penalties and audits as instruments of enforcement with psychological insights into the operation of fair methods, norms, and attitudes on compliance. In this Tax Chat! we discuss the origins of SSF and explore the different types of power – harsh/coercive and soft/legitimate. The SSF posits that legitimate power strengthens trust, and coercive power weakens trust, but also notes the interaction with emotions – even coercive power can be perceived as legitimate if it is properly targeted, e.g., used to detect free riders that exploit the tax system.
Our discussion was really quite comprehensive, covering psychological methodology, the results of field and lab experiments on the impact of audits on tax compliance, cooperative compliance and horizontal monitoring, the effectiveness of tax amnesties, and the impact of emotions on tax compliance. Finally, we discussed how taxpayers may perceive economic stimulus measures both today in the midst of the pandemic, and going forward as the world slowly recovers, and how that perception may influence compliance decisions.
So please check out this Tax Chat! episode here. And please subscribe to our channel if you like our videos …
We hope to see you on Tuesday at our next Tax Chat! The Tax Chat! is free but you need to register in order to receive the zoom link. You can register here.
Thanks so much, and take care and stay safe.
Nina E. Olson