A multidisciplinary analysis of tax reform: from politics to human behavior

Abstract

This thesis has the overarching aim to analyze tax policy in four different stages and through a multidisciplinary lens. The first stage of analysis is pertaining to how do reforms come to be: are they defined and pushed by economic forces or rather electoral interests? I do this by taking a political economy approach theoretically and using empirical analysis of electoral and tax reform data. The second stage analyzes what happens when reform passes or is already pushed through as law. Do different countries with different legal cultures and traditions write their laws differently? In this chapter, I use a legal empirical lens to analyze the differences across the EU regarding the legal implementation of the 4th AMLD that sought to make taxes a predicate crime for money laundering. I do this through a proprietary novel dataset of tax crime and money laundering law across the EU. In the third chapter, I go one stage further by analyzing how these laws are implemented by different countries, and especially how they are used by the public authorities in charge. In order to do this, I combine the previously used legal dataset with survey analysis and in-depth interviews; I use a mixed-methods approach that combines correlations with qualitative data interpretation. The fourth and final stage is that of the individual. Once reform has happened, the law has been made, and those responsible for said policy have applied it, how does it affect individual taxpayers or citizens? Through an online experiment with a representative UK sample, I analyze how a mistake on behalf of the tax authority can reduce tax compliance. Therefore getting insights into the importance of proper behavior from tax authorities in order to foster trust on behalf of taxpayers.