Does the sole description of a tax authority affect tax evasion? The impact of described coercive and legitimate power.

Following the classic economic model of tax evasion, taxpayers base their tax decisions on economic determinants, like fine rate and audit probability. Empirical findings on the relationship between economic key determinants and tax evasion are inconsistent and suggest that taxpayers may rather rely on their beliefs about tax authority’s power. Descriptions of the tax authority’s power may affect taxpayers’ beliefs and as such tax evasion. Experiment 1 investigates the impact of fines and beliefs regarding tax authority’s power on tax evasion. Experiments 2-4 are conducted to examine the effect of varying descriptions about a tax authority’s power on participants’ beliefs and respective tax evasion. It is investigated whether tax evasion is influenced by the description of an authority wielding coercive power (Experiment 2), legitimate power (Experiment 3), and coercive and legitimate power combined (Experiment 4). Further, it is examined whether a contrast of the description of power (low to high power; high to low power) impacts tax evasion (Experiments 2-4). Results show that the amount of fine does not impact tax payments, whereas participants’ beliefs regarding tax authority’s power significantly shape compliance decisions. Descriptions of high coercive power as well as high legitimate power affect beliefs about tax authority’s power and positively impact tax honesty. This effect still holds if both qualities of power are applied simultaneously. The contrast of descriptions has little impact on tax evasion. The current study indicates that descriptions of the tax authority, e.g., in information brochures and media reports, have more influence on beliefs and tax payments than information on fine rates. Methodically, these considerations become particularly important when descriptions or vignettes are used besides objective information

Tax Enforcement in an Agent-Based Model with Endogenous Audits

We generalize the classic Allingham and Sandmo’s model of tax evasion considering heterogeneous agents with different degrees of tax morale and matchable, as opposed to non-matchable, income. The Tax Agency evolves its control scheme, maximizing the revenues from fines, and takes into account some minimal information on the taxpayers. We compare different audit policies and find that the most effective scheme remarkably depends on the way agents update the subjective probability of being audited, on the distribution of matchable income in the population as well as on the level of tax morale. Hence, different features of societies and taxpayers’ behaviors not only affect the compliance rate, as expected, but require the Tax Agency to alter its audit policy in a context-dependent way. In particular, high revenues are obtained performing random audits when agents think they are directed towards peculiar individuals and, conversely, should be biased towards low declarations when taxpayers believe audits are nonspecific or random

Eliciting taxpayer preferences increases tax compliance

Two experiments show that eliciting taxpayer preferences on government spending—providing taxpayer agency--increases tax compliance. We first create an income and taxation environment in a laboratory setting to test for compliance with a lab tax. Allowing a treatment group to express nonbinding preferences over tax spending priorities, leads to a 16% increase in tax compliance. A followup online study tests this treatment with a simulation of paying US federal taxes. Allowing taxpayers to signal their preferences on the distribution of government spending, results in a 15% reduction in the stated take-up rate of a questionable tax loophole. Providing taxpayer agency recouples tax payments with the public services obtained in return, reduces general anti-tax sentiment, and holds satisfaction with tax payment stable despite increased compliance with tax dues. With tax noncompliance costing the US government $385billion annually, providing taxpayer agency could have meaningful economic impact. At the same time, giving taxpayers a voice may act as a two-way "nudge," transforming tax payment from a passive experience to a channel of communication between taxpayers and government

Treatment outcomes in HIV-infected adolescents attending a community-based antiretroviral therapy clinic in South Africa

<p>Abstract</p> <p>Background</p> <p>Very few data are available on treatment outcomes of adolescents living with HIV infection (whether perinatally acquired or sexually acquired) in sub-Saharan Africa. The present study therefore compared the treatment outcomes in adolescents with those of young adults at a public sector community-based ART programme in Cape Town, South Africa.</p> <p>Methods</p> <p>Treatment outcomes of adolescents (9-19 years) were compared with those of young adults (20-28 years), enrolled in a prospective cohort between September 2002 and June 2009. Kaplan-Meier estimates and Cox proportional hazard models were used to assess outcomes and determine associations with age, while adjusting for potential confounders. The treatment outcomes were mortality, loss to follow-up (LTFU), immunological response, virological suppression and virological failure.</p> <p>Results</p> <p>883 patients, including 65 adolescents (47 perinatally infected and 17 sexually infected) and 818 young adults, received ART. There was no difference in median baseline CD4 cell count between adolescents and young adults (133.5 vs 116 cells/μL; <it>p </it>= 0.31). Overall mortality rates in adolescents and young adults were 1.2 (0.3-4.8) and 3.1 (2.4-3.9) deaths per 100 person-years, respectively. Adolescents had lower rates of virological suppression (< 400 copies/mL) at 48 weeks (27.3% vs 63.1%; <it>p </it>< 0.001). Despite this, however, the median change in CD4 count from baseline at 48 weeks of ART was significantly greater for adolescents than young adults (373 vs 187 cells/μL; <it>p </it>= 0.0001). Treatment failure rates were 8.2 (4.6-14.4) and 5.0 (4.1-6.1) per 100 person-years in the two groups. In multivariate analyses, there was no significant difference in LTFU and mortality between age groups but increased risk in virological failure [AHR 2.06 (95% CI 1.11-3.81; <it>p </it>= 0.002)] in adolescents.</p> <p>Conclusions</p> <p>Despite lower virological suppression rates and higher rates of virological failure, immunological responses were nevertheless greater in adolescents than young adults whereas rates of mortality and LTFU were similar. Further studies to determine the reasons for poorer virological outcomes are needed.</p

[Comment] Redefine statistical significance

The lack of reproducibility of scientific studies has caused growing concern over the credibility of claims of new discoveries based on “statistically significant” findings. There has been much progress toward documenting and addressing several causes of this lack of reproducibility (e.g., multiple testing, P-hacking, publication bias, and under-powered studies). However, we believe that a leading cause of non-reproducibility has not yet been adequately addressed: Statistical standards of evidence for claiming discoveries in many fields of science are simply too low. Associating “statistically significant” findings with P < 0.05 results in a high rate of false positives even in the absence of other experimental, procedural and reporting problems. For fields where the threshold for defining statistical significance is P<0.05, we propose a change to P<0.005. This simple step would immediately improve the reproducibility of scientific research in many fields. Results that would currently be called “significant” but do not meet the new threshold should instead be called “suggestive.” While statisticians have known the relative weakness of using P≈0.05 as a threshold for discovery and the proposal to lower it to 0.005 is not new (1, 2), a critical mass of researchers now endorse this change. We restrict our recommendation to claims of discovery of new effects. We do not address the appropriate threshold for confirmatory or contradictory replications of existing claims. We also do not advocate changes to discovery thresholds in fields that have already adopted more stringent standards (e.g., genomics and high-energy physics research; see Potential Objections below). We also restrict our recommendation to studies that conduct null hypothesis significance tests. We have diverse views about how best to improve reproducibility, and many of us believe that other ways of summarizing the data, such as Bayes factors or other posterior summaries based on clearly articulated model assumptions, are preferable to P-values. However, changing the P-value threshold is simple and might quickly achieve broad acceptance