Progressive Taxation and Tax Morale

As the link between tax compliance and tax morale is found to be robust,finding the determinants of tax morale can help to understand and fight taxevasion. In this paper we analyze the effect of progressive taxation on taxmorale in a cross-country approach - which has not been investigated before.Our theoretical analysis leads to two testable predictions. First, an individual’stax morale is higher, the more progressive the tax schedule is. Second,the impact of tax progressivity on tax morale is declining in income. In ourempirical analysis, we make use of a unique dataset of tax progressivity measuresand follow most of the tax morale literature by employing the WorldValues Survey to measure tax morale. Controlling for a wide range of variables,we confirm both hypotheses in our empirical analysis.