Details
| Translated title of the contribution | L’incidence des frais de préparation des déclarations fiscales sur les salariés: Données allemandes |
|---|---|
| Original language | Multiple languages |
| Pages (from-to) | 525-554 |
| Number of pages | 30 |
| Journal | Contemporary accounting research |
| Volume | 34 |
| Issue number | 1 |
| Publication status | Published - 13 Mar 2017 |
Abstract
Using a panel of German income tax accounting data from taxpayers with no business income (employees), we find a negative relationship between tax preparation expenses and tax liabilities. However, preparation expenses are shown to exceed estimated tax savings. Specifically, one additional Euro spent on preparation yields an estimated tax savings of 72 cents in an OLS regression and 24 cents in a fixed effects regression. In addition, we observe substantial heterogeneity in tax savings among income groups, but even if we account for long-term tax savings, tax liability reductions exceed tax preparation expenses only for the highest income quintile. In all other income quintiles, average preparation expenses exceed the estimated tax and time savings. Based on these results, we also examine whether other specific benefits affect an individual’s decision to purchase tax preparation services, and the results indicate the importance of the benefits of coping with complexity and reduced uncertainty. Overall, our findings illustrate that the current tax compliance process violates at least two of Adam Smith’s principles of taxation, taxes are neither certain nor fair.
ASJC Scopus subject areas
- Business, Management and Accounting(all)
- Accounting
- Economics, Econometrics and Finance(all)
- Finance
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Contemporary accounting research, Vol. 34, No. 1, 13.03.2017, p. 525-554.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - The Effect of Tax Preparation Expenses for Employees
T2 - Evidence from Germany
AU - Blaufus, Kay
AU - Hechtner, Frank
AU - Möhlmann, Axel
N1 - Publisher Copyright: © CAAA. Copyright: Copyright 2017 Elsevier B.V., All rights reserved.
PY - 2017/3/13
Y1 - 2017/3/13
N2 - Using a panel of German income tax accounting data from taxpayers with no business income (employees), we find a negative relationship between tax preparation expenses and tax liabilities. However, preparation expenses are shown to exceed estimated tax savings. Specifically, one additional Euro spent on preparation yields an estimated tax savings of 72 cents in an OLS regression and 24 cents in a fixed effects regression. In addition, we observe substantial heterogeneity in tax savings among income groups, but even if we account for long-term tax savings, tax liability reductions exceed tax preparation expenses only for the highest income quintile. In all other income quintiles, average preparation expenses exceed the estimated tax and time savings. Based on these results, we also examine whether other specific benefits affect an individual’s decision to purchase tax preparation services, and the results indicate the importance of the benefits of coping with complexity and reduced uncertainty. Overall, our findings illustrate that the current tax compliance process violates at least two of Adam Smith’s principles of taxation, taxes are neither certain nor fair.
AB - Using a panel of German income tax accounting data from taxpayers with no business income (employees), we find a negative relationship between tax preparation expenses and tax liabilities. However, preparation expenses are shown to exceed estimated tax savings. Specifically, one additional Euro spent on preparation yields an estimated tax savings of 72 cents in an OLS regression and 24 cents in a fixed effects regression. In addition, we observe substantial heterogeneity in tax savings among income groups, but even if we account for long-term tax savings, tax liability reductions exceed tax preparation expenses only for the highest income quintile. In all other income quintiles, average preparation expenses exceed the estimated tax and time savings. Based on these results, we also examine whether other specific benefits affect an individual’s decision to purchase tax preparation services, and the results indicate the importance of the benefits of coping with complexity and reduced uncertainty. Overall, our findings illustrate that the current tax compliance process violates at least two of Adam Smith’s principles of taxation, taxes are neither certain nor fair.
UR - http://www.scopus.com/inward/record.url?scp=84992126295&partnerID=8YFLogxK
U2 - 10.1111/1911-3846.12240
DO - 10.1111/1911-3846.12240
M3 - Article
AN - SCOPUS:84992126295
VL - 34
SP - 525
EP - 554
JO - Contemporary accounting research
JF - Contemporary accounting research
SN - 0823-9150
IS - 1
ER -