“But Everybody Does It…”: The Effects Of Perceptions, Moral Pressures, And Informal Sanctions On Tax Cheating

Abstract

Data from the Notre Dame Study of Catholic Parish Life are used to examine how perceptions of tax evasion within a community affect community members' judgments about the moral wrongfulness of tax evasion, their fear of informal sanctions directed against such behavior, and, ultimately, their inclination to evade taxes in the future. We used multilevel linear structural equation modeling to estimate the direct and indirect effects of these variables. We find that the more prevalent an individual perceives tax evasion to be within the community, the less likely the individual will be to judge the act harshly, the less likely he or she will be to fear informal sanctions directed against it, and the more inclined the individual will be to commit tax evasion in the future. The direct effects of individuals' perceptions, their judgments about the moral wrongfulness of tax evasion, and the threat of informal actions are all statistically significant and in the predicted direction. The indirect effects of such perceptions of offending and the direct effects of moral judgments illustrate how informal social control loses force within a moral community and deviant acts may become increasingly acceptable through process of defining deviancy down.