Political Support and Voluntary Tax Compliance

Abstract

We empirically analyze the effect of political support for the government on voluntary tax compliance. To this end, we use 33 survey results of the contingent valuation (CV) method developed and widely used for the valuation of non-market goods in the field of environmental economics. The degree of political support for the government is observed by the results of weekly national polls. Estimation results using probit models reveal the political support for the government has a statistically significant positive effect on voluntary tax compliance. Tax compliance is high when a taxpayer lives in the stronghold of the current president’s party, which also implies a positive correlation between the political support and voluntary tax compliance. Moreover, consistent with previous studies, the higher the education level, the more compliant the taxpayers are. Income and tax compliance has a negative correlation, but in previous studies, the relationship was mixed.