Taxpayers Reveal Attitudes About Economic Patriotism, Tax Evasion
by Barbara Elmore
Two non-native professors at Baylor made what might seem like a surprising discovery at an income tax preparation site in Waco, Texas. They found that patriotic individuals feel positive about paying taxes in support of their country. And although the taxpayers do not tie paying more taxes in absolute dollar terms to patriotism, they do perceive tax cheating as unpatriotic.
The research is the topic of a paper by Jason MacGregor, a Canadian, and Brett Wilkinson, an Australian, titled "The Effect of Economic Patriotism on Tax Morale and Attitudes toward Tax Compliance." The article appeared in 2012 in Advances in Taxation, a journal that specializes in academic articles about federal, state, local and international taxation.
The study of citizen beliefs about taxation and economic patriotism, which the paper defines as "the coordinated behavior of consumers and businesses to make decisions to benefit their national economy," took shape over several years and included at least two U.S. presidential election cycles.
"My colleague and I were intrigued by the notion for years, and we also heard it discussed in presidential debates," said MacGregor, an assistant professor of Accounting.
Pre-election oratory centered on whether people have a patriotic obligation to pay higher taxes to meet the needs of the country. In the most recent campaign cycle, President Obama continued to talk about a "new economic patriotism" in advertisements and speeches.
"It has been a high-profile discussion for quite a while, and it is an interesting topic to explore," said Wilkinson, associate professor and the Roderick L. Holmes Chair of Accountancy. "Does economic patriotism really translate into a willingness to pay higher taxes, or is it only something politicians talk about?"
To find the answer, the two professors studied previous research and designed a simple survey. With permission from a Volunteer Income Tax Assistance (VITA) site, they administered their one-page, two-sided questionnaire to taxpayers who had just left the site. More than three-fourths of the people they asked, 163 of 200, successfully completed the survey. Respondents were mainly low- and middle-income people who went to the VITA site to get free income tax help.
The researchers attribute the high response rate to the simplicity of the survey and the incentive of a candy bar or a soda, which people enjoyed after waiting in line to get their taxes done. No one could take the survey until after getting help with his or her tax return. This was to avoid the appearance that the IRS was seeking taxpayer response.
Previous research in non-tax areas led MacGregor and Wilkinson to expect taxpayers' positive attitudes toward paying taxes to support their country. But the intensity of survey takers' responses did surprise the researchers, especially since opposition to taxes often appears virulent. "The effect of economic patriotism was more pronounced than we thought it would be given the negative views often associated with paying tax," Wilkinson said. "Patriotic taxpayers definitely viewed tax evasion by corporations very negatively."
The research will have widespread applications. Professors who teach classes about taxation will be interested, as well as policymakers who write tax law. The IRS could also benefit. "If people act in ways consistent with economic patriotism, the IRS may be able to increase compliance by emphasizing patriotic themes in its literature," Wilkinson said. In his undergraduate- and graduate-level taxation classes, he will use the research to illustrate what motivates decision-making when people pay taxes, and what motivates policymakers.
The professors are continuing to research attitudes toward taxes. One project near completion studies whether tax preparers are influenced by patriotism or by the best outcome for their clients. The professors are also working on a study of Canadian tax preparers to see if their attitudes are similar to those in the United States.
The professors' Canadian and Australian backgrounds give their research an interesting perspective, said Wilkinson, a U.S. citizen for two years. "It helped us bring an extra dimension to the research."