How do Australians Think about Tax ?. Valerie Braithwaite Regulatory Institutions Network ANU . Presentation Outline. Thinking Complexly about Tax – Alive and Well in the Community Statistical Snapshots of What People Think About Tax and Democracy
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How do Australians Think about Tax ?
Regulatory Institutions Network
Thinking Complexly about Tax – Alive and Well in the Community
Statistical Snapshots of What People Think About Tax and Democracy
A Model to Guide Understanding of How the Public Engage with Tax Reform
Thinking Complexly about Tax
6 tax focused national mail surveys between 1999 and 2005
3 of these surveys tracked Australians responses to the tax reform process that saw the introduction of the goods and services tax (GST)
2000 survey was conducted pre-GST, 2001-2 survey was conducted after the GST came into effect in July 2001, 2005 survey was conducted after the reform process was bedded down
Post the 2005 Federal Budget, Taxpayers were Asked:
Would the budget tax cuts make you financially better off?
• 7% thought they would be somewhat or much better off
• 28% thought they’d be a little better off
• 52% thought no better off, no worse off
• 13% didn’t know
Would the tax cuts make the tax system fairer ?
• 8% thought more fair
• 27% thought a little more fair
• 30% thought no difference
• 12% thought a little less fair
• 22% thought less fair
What should the government have done: reduced taxes or spent more on social services/infrastructure ?
• 28% Reduced taxes
• 13% Depends
• 59% Spent more on social services and infrastructure
Drivers of attitudes to tax cuts or spending on social services and infrastructure?
• Self-interest? A little, not much
• Political party identification? A little more, but not much
• Values and social goals for the democracy? Yes
Comparison with attitudes to GST: Self-interest not very important, values and goals were “squashed” by political identification
Conclusion of these studies: The institutions of politics and the media crowd out and homogenize public views and engender helplessness and disinterest in the deliberative process
Snapshot Statistics of what Australians Think: How many Australians agree or say yes in 2000, 2002, and 2005 to questions on “value for money”?
Do you think the tax you pay is fair given the goods and services you receive from government?
Would you prefer to pay less tax even if it means receiving a more restricted range of goods and services?
How satisfied are you with the way the government spends taxpayers’ money?
15% 21% 17%
Snapshot Statistics of what Australians Think: How many Australians feel oppressed by taxation agreeing with the following in 2000, 2002 and 2005?
I would be better off if I worked less given the rate at which I am taxed
Paying tax means I just can’t get ahead
Paying tax removes the incentive to earn more income
Snapshot Statistics of what Australians Think: How many Australians feel a moral obligation to pay tax in 2000, 2002 and 2005 ?
Do you think you should honestly declare all your tax earnings?
Do you think it is acceptable to overstate tax deductions in your return?
Do you think working for cash-in-hand payments without paying tax is a trivial offence?
Democratic collective self: a self that expects government to deliver in exchange for our cooperation, an expectation of being respected as a citizen
Competitive self: a self that aspires to wealth, power and status in some cases and to a job, family and home in others
Moral self: a self that wants to be honest and seen to be honest, as law abiding, as not needing to be fearful of authority, a good person
Conclusion: Tax reform in its outcomes and process needs to be respectful of these selves.
How is the Democratic Collective Self undermined ?
Tax HFHE (L) 2005
Tax CHFAS 2000
Percent agree or strongly agree
A comparison of levels of disillusionment with Australian democracy
and support for small government and free markets 2000 - 2005
Unskilled factory workers
Small business owners
Tax agents and advisors
Doctors in general practice
Senior judges and barristers
Percent paying a bit less or much less than their fair share
Perceptions of the degree to which different occupational
groups are paying their fair share of tax
Trust in Institutions
How is it being undermined? It hasn’t although it may be harder to “win” by being law abiding (Hypothesis).
Opportunities for investment and prosperity have been high for those who have been able to take advantage of Australia’s favourable economic conditions. Negative relationship to moral obligation.
Opportunities for tax minimization and avoidance have been available for those with wealth. Negative relationship to moral obligation.
Opportunities for those aspiring to home, family and a good job have been less easily accessed by segments of the population. Negative relationship to moral obligation.
Moral Self - How is it being undermined?
Imagine that you have to find a tax adviser. What would your ideal tax adviser be like? Would you give a top or high priority to some who is …
Honest and offers a no fuss service
Good at minimizing tax without taking risks
Willing to be aggressive in reducing the tax bill
Imagine you are caught for tax evasion – not declaring $5,000 in income or claiming work deductions unlawfully worth $5,000. How would you feel if you were caught ?
60% in 2000 and 60% in 2002 said they were likely or certain to feel ashamed or guilty
8% in 2000 and 8% in 2002 said they were likely to feel angry with the tax office and express that anger
7% in 2000 and 8% in 2002 said they would just shrug it off and not worry too much about it
Tax HEHF (L) 2005
Tax ATSFONS 2001
Tax CHFAS 2000
Percent endorsing each motivational posture to
Australian Taxation Office 2000 - 2005
The Wheel of Social Alignments
Braithwaite, Valerie (2009) ‘Tax evasion’ In M. Tonry, Handbook on Crime and Public Policy Oxford: Oxford University Press