Fairness, legitimacy, and tax compliance

Tyler (2006 [1990]) theorises that perceptions of the legitimacy of a legal authority mediate the influence of fairness on individuals compliance with the law. We apply Tylers theory to the tax context to further our understanding of the association between taxpayers fairness perceptions and complia...

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Bibliographic Details
Published in:eJournal of tax research 2022-02, Vol.19 (2), p.186-212
Main Authors: Farrar, Jonathan, Rennie, Morina, Thome, Linda
Format: Article
Language:English
Subjects:
Compliance
Experiments
Hypotheses
Influence
Law
Legitimacy
Perceptions
Procedural justice
Researchers
Tax rates
Taxes
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Summary:Tyler (2006 [1990]) theorises that perceptions of the legitimacy of a legal authority mediate the influence of fairness on individuals compliance with the law. We apply Tylers theory to the tax context to further our understanding of the association between taxpayers fairness perceptions and compliance. We consider both distributive and procedural fairness. Our experimental results, using data from 389 American taxpayers, suggest that distributive fairness and procedural fairness encourage taxpayers compliance, and that these fairness effects are additive. Furthermore, we find that perception of legitimacy mediates the relation between each type of fairness and compliance, and, by so doing, increases taxpayers propensity to pay their taxes.
ISSN:1448-2398