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Essays on Tax Incentives and Tax Disclosures

Authors: Schaefer, Marcel Oliver;

Essays on Tax Incentives and Tax Disclosures

Abstract

This dissertation consists of three essays on (tax) incentives and tax disclosures. The underlying research questions are empirically examined through economic experiments. The first essay examines the effect of overwithholding on retirement savings and how an additional option of saving retroactively for retirement at tax time affects total savings. The results show that overwithholding significantly reduces retirement savings. This outcome can be explained by individuals’ anchoring on their take-home pay when making savings decisions and by individuals’ reduced motivation to save in the presence of overwithholding. Moreover, the introduction of an additional retroactive savings option at tax time increases overall savings by providing information about the correct after-tax income and by emphasizing the importance of a savings norm that nudges individuals to save. Furthermore, the findings demonstrate that immediate taxation results in greater effective savings than deferred taxation. The second essay analyzes the impact of input incentives on time allocation to creative tasks, creative productivity, and the generation of innovative ideas. The results demonstrate that level-based input incentives (bonuses proportional to the time spent) significantly increase the number of innovative ideas. This effect is moderated by intrinsic motivation. Only individuals with low initial intrinsic motivation generate significantly more innovative ideas, whereas those with high initial intrinsic motivation do not. Moreover, incremental input incentives (bonuses that reward time above a threshold) increase intrinsic motivation and prove to be more cost-efficient than level-based input incentives, despite target ratcheting. The third essay investigates how the design of tax disclosures and the moral perceptions of corporate tax avoidance influence investment behavior. The results show that the combination of qualitative and quantitative tax disclosures leads investors who are morally concerned about tax avoidance to increase their investments in firms with responsible tax strategies. These investors invest more in responsible firms than in firms that avoid paying taxes. In contrast, investors without moral concerns are unaffected by tax disclosures. The effects of combined disclosures are driven by quantitative information, while qualitative information does not encourage moral investment behavior.

Keywords

Ratchet Effect, Deferred Taxation, Intrinsic Motivation, 300 | Social sciences, sociology & anthropology::330 | Economics, Überhöhte Quellensteuer, Overwithholding, Creativity, Elaboration Likelihood Model, Vorgelagerte Besteuerung, Incentives, Tax Disclosures, Gift-Exchange-Effekt, Anreize, Investitionsentscheidungen, Steueranreize, Kreativität, Immediate Taxation, Tax Transparency, Nudging, Investment Decisions, Steuertransparenz, Tax Incentives, Tax Morale, Steuerliche Offenlegung, Nachgelagerte Besteuerung, Steuervermeidung, Steuermoral, Altersersparnisse, Sperrklinkeneffekt, Retirement Savings, Tax Avoidance, Intrinsische Motivation, Goal Framing, Goal Setting, Gift-exchange Effect

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
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