Serious tax fraud and noncompliance

Research Summary This article reviews what international evidence exists on the impact of civil and criminal sanctions upon serious tax noncompliance by individuals. This construct lacks sharp definitional boundaries but includes large tax fraud and large-scale evasion that are not dealt with as fraud. Although substantial research and theory have been developed on general tax evasion and compliance, their conclusions might not apply to large-scale intentional fraudsters. No scientifically defensible studies directly compared civil and criminal sanctions for tax fraud, although one U.S. study reported that significantly enhanced criminal sanctions have more effects than enhanced audit levels. Prosecution is public, whereas administrative penalties are confidential, and this fact encourages those caught to pay heavy penalties to avoid publicity, a criminal record, and imprisonment. Policy Implications Although it has yet to be proven that prosecution has a greater or lesser impact on these offenders, increased prosecution might be justified for purposes of moral retribution as well as perceived social fairness.     

Juror interpretations of ambiguous evidence

In the context of a mock jury study, we tested the hypothesis that people's interpretations of ambiguous evidence depend on how (i.e., by whom) that evidence is introduced. Subjects watched a 45-min interrogation of a murder suspect who emphatically asserted her innocence but told an imperfect story. Before the tape, subjects read either the prosecution or defense lawyer's arguments concerning the suspect's interrogation performance; after the tape, they read counter-arguments from the opposing side. Results indicated that subjects high in the need for cognition (NC) were influenced more by arguments that preceded the evidence, whereas low-NC subjects were more influenced by arguments that followed the evidence. Theoretical and practical implications of these findings are discussed.     

DETERRENCE AND MORAL PERSUASION EFFECTS ON CORPORATE TAX COMPLIANCE: FINDINGS FROM A RANDOMIZED CONTROLLED TRIAL*

Previous studies on tax compliance have focused primarily on the tax‐reporting behavior of individuals. This study reports results from a randomized field test of the effects of deterrence and moral persuasion on the tax‐reporting behavior of 4,395 corporations in Israel. Two experimental groups received tax letters, one conveying a deterrent message and the other a moral persuasion message. Three types of measures are used to evaluate compliance based on the magnitude of the difference‐in‐differences of means in 1) gross sales values reported to the authority, 2) tax dollars paid to the authority, and 3) tax deductions. Overall, both deterrence and moral persuasion approaches do not produce statistically significant greater compliance compared with control conditions. These results do not support the ability of a policy of sending tax letters to increase substantively the reporting of true tax liability or tax payments by corporations. However, these results also show that moral persuasion can be counterproductive: Corporations in this experimental group show an increase rather than a decrease in tax deductions, which translates into loss of state revenues. The implications for theory, research, and tax policy are discussed.     

Neutralization and Tax Evasion: How Effective Would a Moral Appeal Be in Improving Compliance to Tax Laws?

The failure of individuals to pay their taxes in full is a serious budgetary problem for the federal government. Existing research (Schwartz and Orleans, 1967; Grasmick and Scott, 1982) suggests that efforts to increase the guilt feelings experienced for tax evasion might improve compliance. However, neutralization theory (Sykes and Matza, 1957) predicts that guilt feelings can be reduced by neutralization strategies which justify guilt-producing behavior, compromising the inhibiting effect of guilt feelings. Our research shows that through the use of neutralization strategies which justify tax evasion the inhibiting effect of guilt feelings is sharply reduced. The implications of this finding for tax compliance programs based on appeals to the moral obligation of paying taxes are discussed.     

Moral Suasion and Taxpayer Compliance

Some evidence suggests that certain taxpayers might increase their “voluntary” compliance with the tax laws if presented with the right “moral appeals.” If such appeals were relatively inexpensive, compared to hiring more auditors, say, even small improvements in compliance would justify such efforts. However, would such appeals be “justified” in some philosophical, as opposed to economic or psychological, sense? The moral grounds for voluntary cooperation with the tax collection agency turn out, on close scrutiny, to be surprisingly narrow. Though firm, these moral grounds also contain– arguably, at least–one important exception.     

Legal Truths and Falsities*

This paper has a two‐pronged thesis. First, laws should be understood as making factual claims about the moral order. Second, the truth or falsity of these claims depends as much on the content of the law as on whether the lawmaker has political authority. In particular, laws produced by legitimate authorities are successful as laws when they guide subjects' behavior by giving subjects authoritative reasons for action. This paper argues that laws produced by legitimate authorities accomplish this task (i) by being on their own sufficient to change the moral state of affairs, which (ii) thereby generates for people new moral reasons to act that they can read right off of the legislation.     

Why we need the independent sector: the behavior, law, and ethics of not-for-profit hospitals

Among the major forms of corporate ownership, the not-for-profit ownership form is distinct in its behavior, legal constraints, and moral obligations. A new empirical analysis of the American Hospital industry, using eleven years of data for all urban general hospitals in the country, shows that corporate form accounts for large differences in the provision of specific medical services. Not-for-profit hospitals systematically provide both private and public goods that are in the public interest, and that other forms fail to provide. Two hypotheses are proposed to account for the findings, one legal and one moral. While no causal claims are made, not-for-profit hospital behavior is consistent with the behavior required by law and morality. The moral argument, developed as a preliminary theory of not-for-profit ethics, also provides a potential reason to prefer not-for-profit hospitals. The findings provide a new justification for the not-for-profit tax exemption for hospitals, and also suggest new uses for ownership categories as regulatory tools.     

Public Lawyers and Private Clients: An Empirical Observation on the Relative Success Rates of Cause Lawyers

Cause lawyering is often criticized for creating an untenable tension between the professional obligations of the lawyer to the individual client and the lawyer's ideological commitment to public causes. I sought to test empirically the validity of this argument by comparing the relative success rates of political lawyers and non‐political lawyers in defending their clients' interests in litigation concerning house‐demolition orders before the Israeli High Court of Justice. I found that the general success rates of political lawyers in the research population were significantly higher than those of non‐political lawyers. These findings can serve as an additional support for the various arguments in favor of cause lawyering.     

有关涉税犯罪司法解释的探讨

最高人民法院2002年11月5日发布了《关于审理偷税抗税刑事案件具体应用法律若干问题的解释》(以下简称《解释》),其作用显而易见。但其中列举的偷税手段不全面,对一些偷税手段以及一些特殊情况下如何计算偷税百分比没有解释,对拒不申报纳税以及偷税数额的解释有瑕疵,这些问题有待进一步完善和明确。     

A Typology of Tax Compliance in Developing Economies: Empirical Evidence from China's Shoe Industry

Drawing on fieldwork investigations of shoe manufacturers in southeastern China, this article provides empirical evidence for understanding these businesses’ taxpaying practices. We find that since business taxpayers largely regard tax law as illegitimate, instrumental considerations dominate these taxpayers’ decisions to pay or not pay taxes. We then incorporate “structural opportunities for evasion” and “perceived costs of evasion” to develop a two‐by‐two matrix to understand the following types of behavior: aggressive evasion, obliged compliance, strategic compliance, and reciprocal compliance. We argue that this matrix explains why value added tax fraud is widespread in China while voluntary compliance is rare. It also helps to illuminate compliance more generally in developing economies.     

Hypothetical consent and moral force

This article starts by examining the appeal to hypothetical consent as used by law and economics writers. I argue that their use of this kind of argument has no moral force whatever. I then briefly examine, through some remarks on Rawls and Scanlon, the conditions under which such an argument would have moral force. Finally, I bring these considerations to bear to criticize the argument of judge Frank Easterbrook's majority opinion in Flamm v. Eberstadt.     

<Emphasis Type="Italic">The Lesser Evil Dilemma for</Emphasis> Sparing Civilians

The rule I call ‘Civilian Immunity’ – the rule that prohibits targeting civilians in war – is the heart of the accepted jus in bello code. It prohibits targeting (viz., intentionally killing) civilians in a wide variety of war circumstances. Seth Lazar's brilliant book, Sparing Civilians, attempts to defend Civilian Immunity. In this essay I show, first, that his ‘Risky-Killing based argument’ fails to provide civilians with the robust protection Sparing Civilians promises. I argue, secondly, that the moral framework that Sparing Civilians employs, a moral framework that centralizes the Deontological Clause (stating that one's intentional killing is worse than enabling others to kill), leaves the immunity of civilians against Leaders unexplained.     

Moral disengagement and self-reported harassment proclivity in men: the mediating effects of moral judgment and emotions

Three online studies investigated the association between moral disengagement and men’s self-reported harassment proclivity. Participants (total N?=?336) were required to read a vignette depicting either quid pro quo harassment (studies 1 and 2) or hostile work environment harassment (study 3). A salience manipulation was used in each study to explore the causal directionality of this association. The mediating effects of moral judgment, negative affect (guilt and shame) and positive affect (happiness) about the harassment were also assessed as participants were asked to imagine themselves as the harassment perpetrator. Across the three studies, it was shown that moral disengagement had an indirect effect in predicting men’s proclivity to harass by lowering their moral judgment and negative affect about the harassment, conversely amplifying positive affect. Overall, the findings support social cognitive theory, indicating that moral disengagement may enable people to self-regulate their own behavioural inclinations to harass.     

动物法律地位刍议——私法视野下的分析

在动物法律地位问题上,存在"肯定论"和"否定论"两种观点。"肯定论"的观点在认识论上忽视了动物不可能具有道德判断能力的事实,在本体论上曲解了法律主体据以享有权利的"内在价值"的含义,在私法理论上带来一系列的难题,在法律制度上缺乏可操作性,故不足取。"否定论"中的"义务论"观点则认为,需要人类保护的动物乃是人类的保护义务的客体。"义务论"既可以达到"肯定论"拟保护动物的目的,又完全不与现有的法律理论和制度相冲突,还具有可操作性,所以是解决动物法律地位问题的最佳方案。     

论不动产登记“缩略”的不法性及其阻却

不动产登记缩略的不法性具有公法、私法双重面相。就其公法不法性,可通过行政处罚等公法手段予以规制,并得与其私法效果相区隔。就私法效果而言,登记缩略因违反登记要件主义,使得该三方当事人所期望的物权效果无法实现;并因黑白合同的存在,导致其不法性进一步扩散,使之层叠为税费规避、强制性法律规范违反和虚伪表示的交错。登记缩略在私法解释学上的核心,在于如何焊接因中间登记省略而断裂的物权链,从而阻却其违法性,其方法包括授权理论、期待权理论和我国实务中的黑白合同方式;登记缩略的原因债权行为表现为链式交易合同、债权让与、利益第三人合同或第三人履行合同,其履行则表现为给付连锁、缩短给付或指示给付;因我国物权变动模式之通说尚未形成,仅依据《物权法》第15条,登记缩略情形下物债效力区隔和传递,存在多种解释余地。     

Shifting Conceptions of Sexual Discrimination at the Court of Justice: from P v S to Grant v SWT

Decisions of the Court of Justice have challenged traditional notions of sexual discrimination. In P v S and Cornwall County Council, the Court held that discrimination against transsexuals was contrary to the 1976 Equal Treatment Directive. However, in Grant v South‐West Trains, the Court rejected arguments that Article 119 on equal pay prohibited discrimination on the basis of sexual orientation. This article contrasts the two decisions, and in particular focuses on the inconsistencies in the Court's definition of what constitutes sexual discrimination. The article further considers the underlying factors which may have influenced the Court's judgment, including the moral dimension and the political context of the two decisions. Finally, there is a discussion of the merits of equality litigation strategies, in particular at the Court of Justice.     

"Training in Citizenship": Tax Compliance and Modernity

Do the attempts of modern states to foster tax compliance reflect wider attributes of modernity? This article analyzes the history of the creation of a tax compliance culture in Israel of the 1950s and the various practices, techniques, and discourses that were deployed by the state to create model taxpaying citizens. It shows how the specific history of tax compliance can be understood as part of a wider phenomenon: the desire of modern states to create self‐policing, normalized subjects. By interpreting the history of tax compliance critically, as part of the attempt of the state to control its citizens, the article suggests a new way of understanding the history of twentieth‐century tax compliance generally and more specifically the history of judicial attempts to tackle tax evasion and tax avoidance.