Part 1 - AL-Tax

Chapter 12AbstractTransitional economies are unable to rely on the innovation of taxation taken for grantedin developed economies. One such innovation is the expectation of tax compliance. Theethics of tax evasion has been discussed sporadically in the theological and philosophicalliterature for at least 500 years. Martin Crowe wrote a doctoral thesis that reviewed muchof that literature in 1944. This chapter begins with a review of such literature and identifiesthe main issues and summarizes the three main viewpoints that have emerged overthe centuries. It then reports on the results of a survey of Ukrainian law students who wereasked their opinions on the ethics of tax evasion. The survey consisted of 18 statements,representing the 15 issues and three viewpoints that have emerged over the centuries, plusthree statements representing more recent issues. Participants were asked to signify theextent of their agreement with each statement by placing a number from 0 to 6 in the spaceprovided. The data were then analyzed to determine which of the three viewpoints wasdominant among the sample population. The tax regime in Ukraine has much in commonwith the tax regimes in other transition economies. Thus, the lessons learned from thisstudy have application to other transition economies.12.1 IntroductionMost studies of tax evasion take an economic or public finance perspective. Notmuch has been written from a philosophical or ethical viewpoint. That is probablybecause most economists are utilitarians and most lawyers are legalists. However,there is a small body of literature that addresses tax evasion issues from a philosophicalor theological perspective. The present study is intended to summarizethat small body of literature while forming a bridge to the public finance literatureas well. The authors developed a survey instrument that included 18 statementsincorporating the three major views on the ethics of tax evasion that have emergedin the literature over the last 500 years. The survey was distributed to a group of lawstudents in Odessa, Ukraine. This chapter reports on the results and the statisticalvalidity of that survey.12.2 Review of the literatureA review of the literature on the ethics of tax evasion reveals that three majorviews have evolved over the last 500 years. One view takes the position that taxevasion is always or almost always unethical, either because there is a duty to Godto pay taxes, or there is a duty to some community or to society. Another view is293