Duty, Fear, and Tax Compliance: The Heuristic Basis of Citizenship Behavior

TLDR

The uncertainty of enforcement makes the cost of tax duties a strong incentive for free‑riding, and the duty heuristic both motivates compliance and distorts citizens’ beliefs about the likelihood of being caught. The study tests whether citizens’ sense of duty to obey tax laws biases their perception of enforcement risk, causing those who feel more committed to overestimate the expected penalty for non‑compliance. Using regression analysis of survey responses and tax‑return data from 445 taxpayers, the authors examine the relationship between duty beliefs, perceived risk, and actual audit probabilities. Results show that perceived risk of being caught correlates more with duty beliefs than with objective risk factors, and that audit probabilities influence only high‑temptation taxpayers, whereas duty affects both tempted and ordinary taxpayers equally.

Abstract

Theory: The costs imposed by income tax and other citizenship duties provide powerful incentives to free ride, yet the likelihood of getting caught-the primary self-interested deterrent to free-riding-is unlikely to be known with much accuracy by most citizens. Thus the duty heuristic provides not only a direct motivation to comply, but also influences behavior through cognitive processes that bias self-interested beliefs about the advantages of free-riding. Hypothesis: Citizens' beliefs about their duty to obey laws of the state bias their information processing and judgements about the fear of getting caught and punished for disobedience, so citizens reporting greater commitment to obey tax laws systematically overestimate the expected penalty for noncompliance. Methods: Regression analysis of survey and tax-return data for 445 taxpayers. Results: Subjective risk of getting caught is more closely related to duty than to objective risk factors. Objective audit probabilities affect only taxpayers with greater temptation to cheat, but duty influences tempted taxpayers as much as ordinary taxpayers.