How do Australians Think about Tax

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How do Australians Think about Tax ?
Valerie Braithwaite Regulatory Institutions
Network ANU
Public Perceptions Making the Connection between
Tax, Investment and Return, Per Capita Working
Seminar, Canberra, 7 July 2009
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Presentation Outline
Thinking Complexly about Tax Alive and Well in
the Community Statistical Snapshots of What
People Think About Tax and Democracy A Model to
Guide Understanding of How the Public Engage with
Tax Reform
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Thinking Complexly about Tax
6 tax focused national mail surveys between 1999
and 2005 3 of these surveys tracked
Australians responses to the tax reform process
that saw the introduction of the goods and
services tax (GST) 2000 survey was conducted
pre-GST, 2001-2 survey was conducted after the
GST came into effect in July 2001, 2005 survey
was conducted after the reform process was bedded
down
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Post the 2005 Federal Budget, Taxpayers were
Asked Would the budget tax cuts make you
financially better off?
7 thought they would be somewhat or much
better off 28 thought theyd be a little
better off 52 thought no better off, no worse
off 13 didnt know
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Would the tax cuts make the tax system fairer ?
8 thought more fair 27 thought a little
more fair 30 thought no difference 12
thought a little less fair 22 thought less
fair
6
What should the government have done reduced
taxes or spent more on social services/infrastruct
ure ?
28 Reduced taxes 13 Depends 59
Spent more on social services and infrastructure
7
Drivers of attitudes to tax cuts or spending on
social services and infrastructure?
Self-interest? A little, not much
Political party identification? A little more,
but not much Values and social goals for the
democracy? Yes
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Comparison with attitudes to GST Self-interest
not very important, values and goals were
squashed by political identification
Conclusion of these studies The institutions of
politics and the media crowd out and homogenize
public views and engender helplessness and
disinterest in the deliberative process
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Snapshot Statistics of what Australians Think
How many Australians agree or say yes in 2000,
2002, and 2005 to questions on value for money?
Do you think the tax you pay is fair given the
goods and services you receive from government?
37 39 34 Would you prefer to pay less tax
even if it means receiving a more restricted
range of goods and services? 31 38 27 How
satisfied are you with the way the government
spends taxpayers money? 15 21 17
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Snapshot Statistics of what Australians Think
How many Australians feel oppressed by taxation
agreeing with the following in 2000, 2002 and
2005?
I would be better off if I worked less given the
rate at which I am taxed 31 29 26 Paying tax
means I just cant get ahead 28 29 29 Paying
tax removes the incentive to earn more
income 56 49 48
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Snapshot Statistics of what Australians Think
How many Australians feel a moral obligation to
pay tax in 2000, 2002 and 2005 ?
Do you think you should honestly declare all your
tax earnings? 72 72 72 Yes Do you think
it is acceptable to overstate tax deductions in
your return? 8 7 6 Yes Do you think
working for cash-in-hand payments without paying
tax is a trivial offence? 32 31 28 Yes
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Democratic collective self a self that expects
government to deliver in exchange for our
cooperation, an expectation of being respected as
a citizen Competitive self a self that aspires
to wealth, power and status in some cases and to
a job, family and home in others Moral self a
self that wants to be honest and seen to be
honest, as law abiding, as not needing to be
fearful of authority, a good person Conclusion
Tax reform in its outcomes and process needs to
be respectful of these selves.
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How is the Democratic Collective Self undermined ?
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15
5
Unskilled factory workers
6
9
Farm labourers
9
11
Waitresses
10
24
Trades people
22
23
Small business owners
24
29
Farm owners
29
Tax ATSFONS
47
Tax CHFAS
Tax agents and advisors
45
49
Doctors in general practice
51
60
Surgeons
59
73
Senior judges and barristers
64
75
Owner managers
70
78
Chief executives
77
0
10
20
30
40
50
60
70
80
90
Percent paying a bit less or much less than their
fair share
Perceptions of the degree to which different
occupational groups are paying their fair share
of tax
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Trust in Institutions
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Competitive Self
How is it being undermined? It hasnt although it
may be harder to win by being law abiding
(Hypothesis). Opportunities for investment and
prosperity have been high for those who have been
able to take advantage of Australias favourable
economic conditions. Negative relationship to
moral obligation. Opportunities for tax
minimization and avoidance have been available
for those with wealth. Negative relationship to
moral obligation. Opportunities for those
aspiring to home, family and a good job have been
less easily accessed by segments of the
population. Negative relationship to moral
obligation.
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Moral Self - How is it being undermined?
Imagine that you have to find a tax adviser. What
would your ideal tax adviser be like? Would you
give a top or high priority to some who is
Honest and offers a no fuss service 85 82 85
Good at minimizing tax without taking risks 30
26 21 Willing to be aggressive in reducing
the tax bill 24 20 20
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Imagine you are caught for tax evasion not
declaring 5,000 in income or claiming work
deductions unlawfully worth 5,000. How would you
feel if you were caught ?
60 in 2000 and 60 in 2002 said they were likely
or certain to feel ashamed or guilty 8 in 2000
and 8 in 2002 said they were likely to feel
angry with the tax office and express that
anger 7 in 2000 and 8 in 2002 said they would
just shrug it off and not worry too much about it
21
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Gameplaying
10
13
5
Disengagement
7
6
57
Resistance
57
55
Tax HEHF (L) 2005
Tax ATSFONS 2001
74
Tax CHFAS 2000
72
Capitulation
73
92
94
Commitment
92
0
20
40
60
80
100
Percent agreement
Percent endorsing each motivational posture to
Australian Taxation Office 2000 - 2005
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