| 10.04.2024

New study reveals moral motivations behind tax payments and evasion

What motivates people to pay their taxes? And what shapes moral condemnation of tax evasion? New research uncovers the complex moral psychology underlying why people pay taxes or evade them, providing insights for sustaining ethical cooperation as financial technologies evolve.

In his doctoral thesis Jori Grym explains what makes people feel good when they pay taxes to support society versus the harsh judgments of those who cheat the system through evasion.

As Grym explains: "Communal motivations to contribute to the public good fuel positive emotions around paying taxes. But merely following rules and obeying authorities doesn't enhance that warm glow feeling. In contrast, rule-following motivations strongly predict moral condemnation of tax evasion, while communal motivations have little impact on those negative judgments", Grym continues.

In his research, Grym also uncovered how emerging technologies can unconsciously shift perceptions of unethical acts as more acceptable. Tax evasion was seen as less unethical when undertaken using cryptocurrencies versus traditional stock trading.

"People's opinions of the moral character of cryptocurrency traders were more positive.," notes Grym. "This led them to judge the same act of tax evasion as less unethical when cryptocurrencies were involved compared to stocks."

Jori Grym points out that as new technologies change the markets, we should actively ensure that new innovations are built on ethical principles right from the beginning. Otherwise, public judgments of right and wrong risk drifting based on unconscious biases sparked by new financial instruments.

You can read the whole thesis here:
Judging Decisions : Essays on Moral Judgement and Ethical Decisions in the Context of Tax Morale

More information:
Jori Grym
E-mail: jori.grym@hanken.fi

Jori Grym will defend his thesis on 19 April, at 14.00 in Hanken School of Economics, Arkadiankatu 22, Helsinki.
The doctoral defense will be held as hybrid. Participants can attend on site or via videoconference. Access the video conference via this link:
Videolink Jori Grym

Opponent: Vincent Somville, NHH Norwegian School of Economics
Chair: Jaakko Aspara

Foto: Towfiqu barbhuiya / Unsplash