Abstract
Deterrence can boost compliance with tax authorities or undermine it depending on whether taxpayers cope with the threat of taxation through thinking morally, or feeling oppressed or taking control of the tax they pay. When feeling oppressed dominates thinking morally in response to deterrence, resistant defiance is expressed. When taking control and feeling oppressed dominate thinking morally, dismissive defiance is expressed. Longitudinal data shows that perceived deterrence predicts lower tax evasion. Over and above this prediction is the finding that dismissive defiance (which can increase or decrease with deterrence) predicts higher tax evasion. Deterrence needs to be used judiciously. If deterrence promotes dismissive defiance through being seen as too weak or too oppressive, deterrence may prove counterproductive.
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