TY - GEN A1 - Schnellenbach, Jan T1 - Tax Morale and the Legitimacy of Economic Policy T2 - Homo Oeconomicus N2 - It is proposed that a more accurate prediction of tax evasion activity than in the standard portfolio-choice model can be derived even for risk-neutral individuals if psychological costs are considered. Contrary to earlier models integrating psychological costs they are systematically derived by assuming a relationship between psychological costs, taxpayer satisfaction with public policy and taxes evaded. A formal concept of legitimacy of public policies is introduced and it is shown that legitimacy influences evasion activity. KW - Tax evasion KW - Tax morale KW - economics and psychology KW - political legitimacy Y1 - 2007 SN - 0943-0180 VL - 24 IS - 1 SP - 21 EP - 45 ER - TY - GEN A1 - Schnellenbach, Jan T1 - Tax Morale and the Taming of Leviathan T2 - Constitutional Political Economy N2 - An explanation for tax morale based upon a simple model of psychological costs that depend on the perceived legitimacy of public policies is introduced. It is shown that empirically observed low levels of tax evasion can be explained even for a risk-neutral taxpayer with such a model. In a discussion of aggregate tax revenue, it is argued that tax revenue as a function of tax rates may differ fundamentally from the notorious Laffer curve. It is then necessary to look at the interaction of formal and informal institutions to predict the nominal tax rates chosen by a revenue maximizer. KW - Tax evasion KW - Tax morale KW - Cognitive dissonance KW - Informal institutions KW - H26 KW - Z13 Y1 - 2006 U6 - https://doi.org/10.1007/s10602-006-0001-y SN - 1043-4062 VL - 17 IS - 2 SP - 117 EP - 132 ER -