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Resistant and Dismissive Defiance in Taxation: A Challenge beyond Compliance Valerie Braithwaite

Resistant and Dismissive Defiance in Taxation: A Challenge beyond Compliance Valerie Braithwaite Regulatory Institutions Network Australian National University OECD/FTA Conference: Influencing Taxpayers’ Compliance Behaviour 28-29 September 2009, The Hague, The Netherlands.

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Resistant and Dismissive Defiance in Taxation: A Challenge beyond Compliance Valerie Braithwaite

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  1. Resistant and Dismissive Defiance in Taxation: A Challenge beyond Compliance Valerie Braithwaite Regulatory Institutions Network Australian National University OECD/FTA Conference: Influencing Taxpayers’ Compliance Behaviour 28-29 September 2009, The Hague, The Netherlands

  2. What do tax agencies have going for them – The Glass Half Full What do tax agencies have going against them – The Glass Half Empty The process of learning a new way forward – See Both Realities

  3. Glass Half Full

  4. Snapshot Statistics of what Australians Think: How many Australians feel a moral obligation to pay tax in 2000, 2002 and 2005 ?

  5. 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

  6. How is the moral self 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 …

  7. Glass Half Empty

  8. Snapshot Statistics of what Australians Think: How many Australians feel oppressed by taxation agreeing with the following in 2000, 2002 and 2005?

  9. How is the status seeking self undermined? Pathways to success are more easily accessed by some than others: Opportunities for investment and prosperity Opportunities for tax minimization and avoidance Opportunities for home, family and job. Correlational analyses show that those who seek these opportunities most strongly express weaker moral obligation.

  10. 5 Unskilled factory workers 6 9 Farm labourers 9 11 Waitresses 10 24 Trades people 22 23 Small business owners 24 29 Farm owners 29 Tax ATSFONS Tax CHFAS 47 Tax agents and advisors 45 49 Doctors in general practice 51 60 Surgeons 59 73 Senior judges and barristers 64 75 Owner managers 70 78 Chief executives 77 0 10 20 30 40 50 60 70 80 90 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

  11. 48 Freemarket 38 40 85 Tax HFHE (L) 2005 Disillusionment 87 Hope 2003 Tax CHFAS 2000 86 0 20 40 60 80 100 Percent agree or strongly agree A comparison of levels of disillusionment with Australian democracy and support for small government and free markets 2000 - 2005

  12. Snapshot Statistics of what Australians Think: How many Australians agree or say yes in 2000, 2002, and 2005 to questions on “value for money”?

  13. 19 18 Police stations 23 21 Hospitals 22 21 Schools 51 51 Lawyers 57 48 54 Tax Office 49 37 57 58 Centrelink 60 62 65 Local council Democracy 2005 64 66 Banks 71 Tax HFHE (L) 2005 Hope 2003 65 Tax ATSFONS 2001 70 Federal government 71 71 73 Newspapers & TV 84 78 80 Insurance companies 86 0 10 20 30 40 50 60 70 80 90 100 Percent who do not trust at all or only a little Percent expressing little trust in institutions 2001 - 2005

  14. Trust in Institutions

  15. 12 Game playing 11 9 Disengagement 8 50 Resistance 55 70 Capitulation 62 82 Hope Commitment Democracy 84 0 20 40 60 80 100 Percent agreement Percent endorsing each motivational posture to federal government

  16. What are the big ideas that we tested? To make the link with policy and practice let us ground the findings in three models of community engagement – practical tools that come out of theory driven and empirically tested research (a) Taxpayers’ Charter (b) ATO Compliance Model (c) Wheel of Social Alignments

  17. Taxpayers’ Charter Content: Transparency in quality decision-making and respectful treatment of taxpayers Idea: Procedural justice  Increases legitimacy of rules and law, cooperation with authority and compliance Obtaining favourable decisions or outcomes is far less important to individuals than experiencing procedural fairness Procedural fairness means impartiality in decisions, consistency in decisions, being treated with respect Reference: Tyler, Tom (2008) Psychology and Institutional Design, Review of Law and Economics 4 (3): 801-887.

  18. The ATO Compliance Model

  19. Responsive Regulatory Pyramids Enforcement pyramidStrengths-based pyramid Ayres, Ian and Braithwaite John (1992) Responsive Regulation: Transcending the Deregulation Debate Oxford: Oxford University Press. Braithwaite, John, Makkai, Toni, and Braithwaite, Valerie (2007) Regulating Aged Care: Ritualism and the New Pyramid Cheltenham: Edward Elgar.

  20. The Wheel of Social Alignments Braithwaite, Valerie (2009) ‘Tax evasion’ In M. Tonry, Handbook on Crime and Public Policy Oxford: Oxford University Press

  21. Implications for Governance

  22. Additional Institutional Arrangements

  23. Conclusions

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