The ‘unconditional’ effect of income source on tax evasion.: Modeling the residual effect of income source on tax evasion in a Swedish sample of self-employed and salaried workers.
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
This study looks at the residual effects of income source on tax evasion by utilizing a measure of tax evasion – undocumented household services – that offers self-employed and salaried workers the same theoretical possibilities of evasion. Thus the effect of tax evasion is decoupled from its structural feature as constraining those whose income is subject to a system of third-party reporting. The main aim of this paper is to assess whether differences in risk of tax evasion between self-employed and salaried workers persist, and if such a difference is better modeled as antecedent to risk of tax evasion, or as moderating other relationships with tax evasion as outcome. This paper also investigates whether any residual effect of income source is due to changes in intermediary noneconomic variables such as tax morale, values, distrust and attitudes (welfare state nonsupport). The results show that when using the current measure of tax evasion - having sold or bought undocumented household services - there is a small but significant difference between self-employed and salaried workers. Self-employed have a greater probability of having self-reported evasive behavior for the past year. The conditional effect of noneconomic determinants on tax evasion, as dependent on income source, is investigated by fitting Linear Probability Models. Tests for moderation using interaction terms are run on the complete sample. Mediation of the effect of income source on tax evasion is tested by fitting models of simple, parallel and serial mediation using PROCESS macro for SPSS (Hayes, 2013). Models where relationships with tax evasion as outcome is moderated by income source receive no support by data. Income source is instead better modeled as antecedent to risk of tax evasion, with part of the effect being associated with variation in values, attitudes, and tax morale. Findings are discussed. Due to unexpectedly weak associations between morale and evasion, a word of caution is offered on modeling tax morale as a proxy for tax evasion, or for other nonpecuniary effect on evasion, without proper problematizing these relationships.
Place, publisher, year, edition, pages
2016. , 58 p.
Tax evasion, tax compliance, tax morale, self-employed, income source, opportunity structure, moderation, mediation, serial mediation, behavior, value-behavior, attitude-behavior, values, trust, distrust, welfare state support, Sweden.
IdentifiersURN: urn:nbn:se:umu:diva-133058OAI: oai:DiVA.org:umu-133058DiVA: diva2:1085758
ProjectsArbetsmarknadens bortglömda aktör. Materiella förhållanden och socialpolitiska värderingar bland småföretagare.