ABSTRACT
Introduction Relatively consistently across taxpaying jurisdictions, younger people are found to be less compliant than middle-aged and older people (Andreoni et al., 1998; Jackson and Milliron, 1986; Mason and Calvin, 1978; Orviska and Hudson, 2002; Wearing and Headey, 1997). The finding has prompted some tax authorities, like the Australian Taxation Office, to tailor their advisory services to young taxpayers through a special purpose online site (Commissioner of Taxation, 2004), while others, like the Swedish Tax Agency, have launched extensive advertising campaigns to educate younger people about the benefits of paying taxes (Wittberg, 2006). Both interventions have research findings to support them. Younger taxpayers are known to be less knowledgeable about tax matters (McKerchar, 2002; Niemirowski and Wearing, 2006a), they have been shown to have a less well developed sense of moral obligation or law abidingness to pay tax (Orviska and Hudson, 2002; Wearing and Headey, 1997), and they are more likely to be skeptical about government authority (Inglehart, 1997; Putnam, 2000; Watts, 1999). This chapter examines whether the lower compliance levels of younger taxpayers are associated with lack of knowledge, less moral obligation or greater skepticism regarding government authority. In the first set of analyses, those under 30 years of age are compared with those in middle-aged and older age groups in terms of (a) tax evasion; (b) knowledge and resources; (c) moral obligation and deterrence; and (d) skepticism as measured by motivational postures in relation to authority. Knowing that age groups differ on these qualities, however, does not mean that all these differences are implicated in noncompliance. Thus, a logistic regression analysis is used to find out which of these factors – knowledge and resources, moral obligation and deterrence, or motivational posturing to authority – explain the relationship between age and tax evasion. Before investigating these relationships using a national survey of Australian taxpayers – the Community Hopes, Fears and Actions Survey – a brief review is undertaken of previous work that underpins expectations of a systemic reason for why younger generations are less compliant.
