Effect of Political Affiliation on Tax Preference

Abstract

Tax collection is significant for the appropriate performance of society. Nonetheless, paying taxes is strongly disliked by many people. Researches have shown that tax aversion is most widespread among people who make out with political parties that, in general, support less taxation. It was hypothesized that there is a significant difference between political affiliation and preference of participants about tax free bond. However, it was found that there is no significant difference between political affiliation of participants and their preference of tax. The research was quantitatively analysed. This research is aimed to provide a theoretical framework for the policy makers and the researchers as well.

Table of Contents

Introduction4

Body: Discussion and Analysis5

Methodology5

Hypothesis5

Analysis5

Discussion8

Validity and Reliability9

Conclusion10

Effect of Political Affiliation on Tax Preference

Introduction

The political party preferences of taxpayers have not often been considered by Fiscal psychology when studying mind-sets toward taxes and tax behaviour. The few studies considering the political affiliation of taxpayers (Hasseldine & Hite, 2003, Lewis, 1978; Wahlund, 1992) have conventionally concentrated on its associations with assessments of particular financial policies (for instance, tax rates tax or reforms), while the impact of political orientations on general fiscal attitudes of taxpayers has paid less attention. A study conducted by Lozza (2011), to dig into the association among political party preferences and attitudes toward taxes within the theoretical context of the slippery slope framework (Kirchler et. al., 2007) and motivational postures. (Braithwaite, 2003)

Carried on in three Italian regions, results come from a survey, with self-employed taxpayers. By using scales proposed by Braithwaite (2003), political affiliation of respondents and their motivational postures and through the tax compliance inventory TAX-I, their compliance intentions were measured through the questionnaire. (Kirchler & Wahl, 2010) Significant differences were shown by the results among centre-right centre-left taxpayers and taxpayers: particularly, higher levels of dedication and voluntary tax complaisance were shown by centre-left voters.

On the contrary, taxpayers who backup centre-right parties demonstrate greater levels in resistance and imposed tax compliance, along other variations. In terms of intend to lessen taxes unlawfully, no considerable differentiations were establish between the two groups: this may imply two somewhat dissimilar models of tax compliance (that is, one for those taxpayers following liberal parties and one for the ones backing social democratic parties) that bring about the similar result in terms of non- payment intention, via different paths.

Body: Discussion and Analysis

Methodology

Hypothesis

H1: There is no significant difference between participants' political affiliation and their preference of tax

Ha: there is significant difference between participants' political affiliation and their preference of tax

Analysis

Tax Preference of Participants

54.5% of the participants prefer tax free bond while 45.5% give a preference to taxed bond.

Political Affiliation of Participants

45% of the supporters of Liberal National party favours tax free bond while 30% and 25% of the labour and Greens backers consider tax free bonds favourable.

40% of the supporters of Liberal National party favours tax free bond while 36% and 24% of the labour and Greens backers consider tax free bonds favourable.

Opinion of Participants about Taxes in Australia

 

Too high

About right

Too low

Tax-free ...