Handbook of Social Capital

Handbook of Social Capital

The Troika of Sociology, Political Science and Economics

Elgar original reference

Edited by Gert Tingaard Svendsen and Gunnar Lind Haase Svendsen

The Handbook of Social Capital offers an important contribution to the study of bonding and bridging social capital networks, balancing the ‘troika’ of sociology, political science and economics. Eminent contributors, including Nobel Prize winner Elinor Ostrom, explore the different scientific approaches required if international research is to embrace both the bright and the more shadowy aspects of social capital. The Handbook stresses the importance of trust for economies all over the world and contains a strong advocacy for cross-disciplinary work within the social sciences.

Chapter 14: Tax Compliance

Lars P. Feld

Subjects: business and management, organisation studies, social policy and sociology, sociology and sociological theory

Extract

1 Lars P. Feld 14.1 Introduction Tax compliance has gained considerable importance for tax policy during the last decade. The German case is particularly instructive in this respect as a policy of tax-cut-cum-base-broadening is accompanied by measures that supposedly reduce tax evasion and avoidance. The German government has hoped to increase tax compliance by fostering deterrence directly (for example, the Black Activities Act of 2004) or indirectly (through facilitated information exchange via the European Savings Directive in 2005), but also by a tax amnesty in 2003. The importance of compliance issues is, however, not only visible in Germany. In the USA discussion on fundamental tax reform, its potential to facilitate compliance is additionally debated (Gale and Holtzblatt, 2002; The President’s Advisory Panel on Federal Tax Reform, 2005: ch. 6). In the UK, the Mirrlees Review, aiming at a fundamental reform of the UK tax system for the twenty-first century, includes a chapter on tax compliance as well (Slemrod et al., 2007). Such attention for tax compliance and administrative issues is a relatively new phenomenon as tax policy used to exclusively focus on efficiency and equity issues. The main focus in the literature on tax compliance, and thus of policies to enhance tax honesty, is on deterrence. When we let this dominance of deterrence prevail in the beginning of our analysis, some interesting insights can be gained. Deterrence (and coercion) by the state in democratic societies governed by the rule of law usually implies the use of sanctions, if...

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