Exploring the Connection between Culture and Taxation: How Trust and Confidence Shape Tax Regimes within Europe

Is it possible that some of the decisions pertaining to taxation are based on latent cultural aspects? This study, set in a purely European context, seeks to analyze tax variations within Europe through the lens of cultural variations. Specifically, how trust, confidence and equality matter with regard to tax revenues and tax progressivity. Within this regard, we achieved strong results linking trust and confidence to higher tax revenues and higher tax progressivity. That is, where trust among societal members is low, and confidence in public institutions is low, regimes opt for low tax revenues and lenient tax rates.