The German Federal Court of Audit's observations of and comments on tax administration and tax compliance

Auditing institutions, such as the German Federal Court of Audit (BRH), provide information on public revenue and public spending. The question of how to increase tax compliance has been of frequent interest. Unfortunately, information from German taxpayers? declaration behaviour (beyond the official income statistics and tax statistics) was neither systematically collected, nor otherwise made accessible for systematic research. However, the BRH selectively observes taxpayers? and tax administrators? behaviour and, on the basis of its audit experiences, comments on tax enforcement and tax compliance. Such recommendations are not just increasingly given by the BRH, but also increasingly considered in political decision making processes. Although the findings are not a representative sample of the German taxpayers? behaviour, they make up available information on tax compliance behaviour in Germany and, therefore, are worth discussing in light of modern economic theories of tax compliance. The reported facts are an appropriate foundation of case studies. --supreme auditing institutions,German Federal Court of Audit,tax administration,tax compliance,tax evasion,tax morality,transactional costs

Das Schwarzarbeit-Änigma

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Tax avoidance, tax evasion, and tax flight: Do legal differences matter?

Although from an economic point of view, legal considerations apart, tax avoidance, tax evasion and tax flight have similar effects, namely a reduction of revenue yields, and are based on the same desire to reduce the tax burden, it is likely that individuals perceive them as different and as unequally fair. Overall, 252 fiscal officers, business students, business lawyers, and entrepreneurs produced spontaneous associations to a scenario either describing tax avoidance, tax evasion, or tax flight, and evaluated it as positive, neutral or negative. The results indicate that social representations differ with respect to tax avoidance, tax evasion, and tax flight. Tax evasion was perceived rather negatively, tax flight neutrally, and tax avoidance positively. Tax knowledge was found not to be correlated neither with tax avoidance nor with tax evasion.tax evasion; social representations; tax knowledge

On the politicization of intergovernmental fiscal relations in Germany after unification

A recent decision of the German Constitutional Court requires political decision makers to revise the system of intergovernmental transfers in order to limit free bargaining among state and federal government officials. The present paper provides empirical support for the thesis that political discretion has become increasingly important in the transfer negotiations after Unification. We attempt to show why political influences gained weight relative to economic considerations in the determination of net gains. This politicization of the fiscal transfer system appears to be a consequence of the inability of policy makers to agree on a fundamental reform in the early 1990's.

Is it sex or personality? The impact of sex-stereotypes on discrimination in applicant selection

This paper investigates whether differential treatment of men and women in the labor market is due to unobservable differences in productivity or if it is motivated by a taste for discrimination. While studies on sex-discrimination typically control for human capital (formal education, job-experience etc.), there is usually no information on personality traits available. We argue that personality might affect productivity just as human capital: For many traditionally male occupations (e.g. managers) stereotypically masculine characteristics - like being ambitious, competitive, dominant - seem to be required. On the other hand, stereotypically feminine characteristics - like being gentle, cheerful, friendly - are particularly acknowledged in traditionally female occupations (e.g. nurses). The central question of this paper is whether women are treated differently because "they are different" (they posses more "feminine" and less "masculine" personality traits on the average) or because they are discriminated against. To gather the necessary data a field experiment is conducted. Job applications of candidates, who are equivalent in their human capital but differ in sex and personality are sent out in response to various job advertisements. We found minor indicators that signaling a masculine personality slightly reduces unfavorable treatment of women in typically male professions; nevertheless discrimination in hiring prevails even after controlling for personality characteristics.sex-discrimination; matching process; experimental economics; economic psychology

What determines informal hiring? Evidence from the Turkish textile sector

Most studies about the shadow economy focus on the estimation of the aggregate size. However, this study aims to address the sectoral or micro aspects of this phenomenon using the data from the textile sector in Turkey. It uses discriminant analysis and ordered and logistic regression models to unveil the determinants of the informal hiring in Turkey. It concludes that high competition, the skill structure of the employees, perceived penalty scheme, and the size of the firms in the sector are important factors of the textile firms hiring informally.informal hiring in Turkish textile sector; discriminant analysis; logistic regression model; ordered regression