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Tax compliance cannot be explained fully by rational choice

02/04/2009 | News

BI expert talks about reasons behind the high depencency ratio and tax evasion in an interview on RTL Klub.

Edited by David Kruzslicz, the programme on RTL klub explored the causes of the high dependency rate and low tax compliance in Hungary.

Very roughly, there are three main groups who pay less tax than they potentially could: those, who are out of work because they cannot find a job, those who take the opportunity to retire early or stay home with their child and live on welfare, and finally those who underreport their taxable earnings, that is, those who cheat.

Government is merely a means to an end, viz. the happiness of the whole community and the individuals composing it. (James Mill, 1820)