FG VWL, insbesondere Mikroökonomik
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- 2007 (1)
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- English (1)
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- economics and psychology (1) (remove)
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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.