Is tax evasion a personality trait?

Summary Despite a growing interest in the non-monetary determinants of tax behavior (tax morality), the recent literature provides little empirical evidence on the link between personality characteristics related to morality and the propensity to evade taxes. Such measures are necessary to understand the transmission channels of anti-avoidance schemes. To address this gap, this paper reports on a laboratory experiment that observes both participants' income reporting behaviors and psychological measures from the psychometrics literature: norm submission, affective and cognitive empathy, and propensity to feel shame and guilt. These measures are combined using principal component analysis to extract independent factors. Our results show that both the decision to defraud and its intensity are strongly related to affective empathy, cognitive empathy, and the public dimension of morality (measured by norm submission and shame propensity). The propensity to feel guilt, on the other hand, has no effect. Most importantly, the overall explanatory power of these individual morality measures is relatively weak. This result calls into question the hypothesis of intrinsic tax morality, and emphasizes the importance of the institutional context for understanding evasion behavior.