SIT-Tax: Social Identity and Tax Compliance

The aim of the project SIT-Tax is to show the moderating impact of social identity (Tajfel and Turner, 1986; Turner, 1982) on the tax specific social norms and justice perceptions (i.e., distributive, procedural, and retributive justice) which in turn influence tax honesty of Austrian taxpayers. Results of Australian studies (Wenzel, 2002b, 2004a, 2004b) indicate the influence of a singular social identity on tax compliance. In extension to these studies, the project SIT-Tax does not only focus on the process of influence but does also incorporate the contents of dual social identities in Austria. As a basis, focus groups are conducted to assess the content of singular and dual social identities of taxpayers as well as their relations. Relevant groups for tax behaviour at varying levels of abstraction are "occupational or employment groups", "Austria", and "EUrope" (i.e., the countries of the European Union). Subsequently, a quantitative study about dual identification with these groups will be carried out. Derived from these findings, the influence of (dual) identity will be investigated regarding (i) what is considered as the appropriate behaviour (i.e., the social norm) and what is considered as fair in terms of (ii) distributive, (iii) procedural, and (iv) retributive justice. (v) It is assumed that the influence of social norms on the taxpaying behaviour of Austrians is determined by the (dual) identification with (a) the respective "occupational or employment group" and (b) "Austria". Persons, who identify highly with a group, internalise the prevalent norms and act accordingly. It is examined whether the norms of the more inclusive category (i.e., Austria) or of the lower-level category (i.e., occupational or employment group) is dominant. (vi) Perceptions of distributive justice are influenced by identification with the "nation" (i.e., Austria, Czech Republic or Great Britain) and "EUrope". It is assumed that the perception of distributive justice concerning the contributions to and the payments of the European Union will be higher, the higher the "EUropean" identification is. (vii) Dual identification with the respective "occupational or employment group" and "Austria" influences the perception of procedural justice. People with a strong dual identification place a higher value on the way their own group is treated by the Austrian tax authority than on the maximised utility of their occupational or employment group. (viii) It is assumed that the dual identity ("honest taxpayer" and "Austrian") influences how a tax amnesty is evaluated with respect to retributive justice. In case of high dual identification, the evaluation is expected to be more negative than in case of low dual identification. Finally, we will be able to derive specific recommendations from the proposed studies for tax policy makers in Austria.

The aim of the -project SIT-Tax- is to show the moderating impact of social identity (Tajfel and Turner, 1986; Turner, 1982) on the tax specific social norms and justice perceptions (i.e., distributive, procedural, and retributive justice) which in turn influence tax honesty of Austrian taxpayers. Results of Australian studies (Wenzel, 2002b, 2004a, 2004b) indicate the influence of a singular social identity on tax compliance. In extension to these studies, the project SIT-Tax does not only focus on the process of influence but does also incorporate the contents of dual social identities in Austria. As a basis, focus groups are conducted to assess the content of singular and dual social identities of taxpayers as well as their relations. Relevant groups for tax behaviour at varying levels of abstraction are "occupational or employment groups", "Austria", and "EUrope" (i.e., the countries of the European Union). Subsequently, a quantitative study about dual identification with these groups will be carried out. Derived from these findings, the influence of (dual) identity will be investigated regarding (i) what is considered as the appropriate behaviour (i.e., the social norm) and what is considered as fair in terms of (ii) distributive, (iii) procedural, and (iv) retributive justice. (i) It is assumed that the influence of social norms on the taxpaying behaviour of Austrians is determined by the (dual) identification with (a) the respective "occupational or employment group" and (b) "Austria". Persons, who identify highly with a group, internalise the prevalent norms and act accordingly. It is examined whether the norms of the more inclusive category (i.e., Austria) or of the lower-level category (i.e., occupational or employment group) is dominant. (ii) Perceptions of distributive justice are influenced by identification with the "nation" (i.e., Austria, Czech Republic or Great Britain) and "EUrope". It is assumed that the perception of distributive justice concerning the contributions to and the payments of the European Union will be higher, the higher the "EUropean" identification is. (iii) Dual identification with the respective "occupational or employment group" and "Austria" influences the perception of procedural justice. People with a strong dual identification place a higher value on the way their own group is treated by the Austrian tax authority than on the maximised utility of their occupational or employment group. (iv) It is assumed that the dual identity ("honest taxpayer" and "Austrian") influences how a tax amnesty is evaluated with respect to retributive justice. In case of high dual identification, the evaluation is expected to be more negative than in case of low dual identification. Finally, we will be able to derive specific recommendations from the proposed studies for tax policy makers in Austria.