Why Americans Don’t Cheat on Their Taxes

If such a thing as American exceptionalism remains, maybe it can be found in this: Despite deep IRS budget cuts, an average audit rate that has plunged in recent years to just 0.6 percent, and a president who has bragged that dodging federal taxes is “smart,” most Americans still pay their income taxes every year. Even more remarkable, most of us feel obliged to pay. To quote the findings of a 2017 IRS survey: “The majority of Americans (88%) say it is not at all acceptable to cheat on taxes; this ethical attitude is not changing over time.

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A more worrisome possibility is that tax morale has lagged behind declining trust, and will yet fall. High-profile tax-avoidance schemes—like those detailed in the so-called Panama Papers, or by The New York Times’s reporting on the Trump family’s tax dodges—could help erode morale. “Our sense of right and wrong is dramatically influenced by other people,” says Dan Ariely, a professor of psychology and behavioral economics at Duke. “If people think that the government is corrupt and not doing the right thing,” he told me, they may be more inclined to say, “Oh, I don’t want to pay money to a government that is misbehaving.”

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