Status quo and future research avenues of tax psychology

Abstract

Tax honesty means to give up short-term self-interest for the good of the community. States need sufficient tax funds to finance public goods such as health care or education. Tax psychology aims to understand citizens’ tax behaviour and to analyse the psychological processes that determine tax honesty. The chapter gives an overview of the history of taxation, the different qualities of tax behaviour, the socio-demographic, economic, psychological, third party and cultural determinants of tax compliance as well as the theoretical models of tax behaviour. Throughout the chapter, research gaps and future research avenues are described. In addition, the most important drivers of future tax research are discussed, including the analyses of interactions between tax compliance determinants, the application of new methods such as field experiments applying machine learning, the boundary conditions and consequences of digitalization and research on tax behaviour in developing and emerging markets.