What Motivates the Honest Taxpayer?

Tax compliance is a complex matter with difficult lines to draw between avoidance and evasion on the one side, and evasion and tax fraud on the other. This is at the top of Tim Lohse's reseach agenda. To examine behavioural aspects of the compliance decision, it is advisable to study a more straightforward problem in the laboratory, which has its initial point in tax evasion experiments among subjects who make a simple decision between two alternatives: whether to declare honestly or not. An important research question is how the formation of considerations about one's subjective audit probability affects compliance behaviour in a face-to-face compliance framework. When analysing this, it is important to disentangle the observed compliance effects from those effects which can be traced back to psychosocial aspects such as the cost of lying or guilt aversion. A second central research topic is the problem of changes in tax compliance if subjects' declarations are not randomly assessed, but based on their appearance as captured by pictures of their faces, even if the aggregate audit probability does not change. The general aim is to understand human compliance behaviour as a function of the institutional setup and the frame of mind in which such compliance behaviour takes place.

Tim Lohse is currently Professor for Applied Microeconomics at the Department of Business and Economics at the Berlin School of Economics and Law (BSEL). He is also a Research Affiliate of the Max-Planck-Institute of Tax Law and Public Finance in Munich. Prior to his role at BSEL, among other positions, he was Senior Research Fellow at the Social Science Research Center Berlin and the Max-Planck-Institute in Munich. Tim Lohse holds an MSc degree in Economics from the Bocconi University in Milan (2003) and diploma (2003) and PhD (2007) degrees in Economics from the Leibniz University Hannover.