200606126

A Preliminary Study of the

Impact of Tax Fairness Perception
Dimensions on Tax Compliance
Behaviour in Australia

Grant Richardson *

Abstract
Tax fairness represents an important variable that can influence tax compliance
behaviour in society. Up until now, research in this area has mostly taken place in the
United States, however, tax fairness and non-compliance with tax laws represents
a major problem affeaing revenue authorities alJ over the World including those
in Australia.The major purpose of this study is to investigate the impact of tax
fairness perception dimensions on tax compliance behaviour in Australia. A survey
questionnaire was administered to a sample of 105 postgraduate business students
at an Australian University during the 2003 year. Factor analysis identified five
tax fairness perception dimensions concerning: general fairness, tax rate structure,
exchange with the government, self-interest and fairness of special provisions.
The impact of the tax fairness dimensions on tax compliance behaviour was then
assessed by OLS multiple regression analysis. The results showed that the tax fairness
dimensions relating to tax rate structure and self-interest were significant Further
analysis confirmed the significance of these two dimensions on tax compliance
behaviour along with demographic variables relating to age and education. From
these preliminary results it seems that while tax fairness is a multidimensional
concept, it only has varying effects on tax compliance behaviour in Australia.

* Grant Richardson is an Assistant Professor in the Department of Accountancy, City

University of Hong Kong.
This article was accepted for publication on 15 April 2005.
407

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408 (2005) 20 AUSTRALIAN TAX FORUM

I. Introduction
Considerable attention has been given in the field of fiscal psychology to
the influence of non-economic variables on tax compliance behaviour
(Cullis and Lewis, 1997, p. 311). In their review of the tax compliance
literature, ]ackson and Milliron (1986, pp. 126-129) identified tax fairness
as one of the key variables which might affect tax compliance behaviour.
In fact, ta..'{ fairness has been recognised in surveys ofAmerican taxpayers
as the most significant objective of the United States income tax system
(Milliron et al., 1989; Copeland and Harmelink, 1995). Up until now,
research in this area has mainly taken place in the United States Oackson
and Milliron, 1986, pp. 127-128; Richardson and Sawyer, 2001, pp. 291-
295), however, tax fairness and non-compliance with tax laws represents
a significant problem facing revenue authorities throughout the World,
including those in Australia.
The major purpose ofthis study is to investigate the impact oftax f.lirness
perception dimensions on tax compliance behaviour in Australia.The study
also has two subsidiary purposes. First, to determine whether Gerbing's
(1988) tax fairness perception dimensions represent universal tax fairness
perception dimensions across different Western jurisdictions. Second, to
investigate the impact of some key demographic tax compliance variables
relating to age, gender, education and occupation status (in conjunction
with tax fairness perception dimensions) on tax compliance behaviour in
Australia.
This study contributes to the tax compliance literature in a number of
important ways. First, this study investigates the associations between tax
f.1irness perception dimensions and tax compliance behaviour in Australia.
Hence, the study answers a recent call made by Richardson and Sawyer
(2001, p. 182) who have stated that: " ... no research has examined the
link between these [tax fairness perception] dimensions and compliance
behaviour." Second, the study examines the possible existence oftax fairness
perception dimensions in a non-American jurisdiction. Thus, the study
answers an additional request made by Andreoni et al. (1998, p. 856) who
have argued that:" ... there is a need for more empirical and institutional
research within jurisdictions outside the U.S." Finally, the study considers
the impact of some of the key tax compliance variables on tax compliance
behaviour in Australia. In so doing, the study adds to the scant empirical
literature in this area and answers the further call made by Tan and Sawyer
(2003,p. 454) who have recently stated that:" ... there is a need for a greater
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 409

understanding of ta..-x:payer compliance and for providing international and

cross-cultural cOlllparisons."
The paper is organised as follows. First, a review of the theoretical
background in this area of tax compliance research will be undertaken,
thereby generating a series of research hypotheses. Second, the research
design and methodology to be applied in the study will be discussed.
Third, the empirical results of the study will be reported. Finally, the overall
conclusions and limitations of the study will be considered.

2. Theoretical background and hypotheses

2.1. NOTION OF TAX FAIRNESS

Public perception that the tax system is fair is critical if it is to rely for
its success on a significant degree of voluntary compliance. Indeed, a tax
system may be less successful to the extent that it is perceived by members
of a society to be unfair and inequitable (Vogel, 1974). This can generate
feelings by taxpayers to evade paying taxes (Spicer and Becker, 1980). It is
because of this assumed association with tax evasion that tax policy makers
are concerned about public perceptions of fairness (Gerbing, 1988). In
the United States, it has been suggested (Birnbaum, 1998) that the need
to increase the public's perception of fairness was a key motivating force
behind the introduction of the Tax Reform Act of 1986.
Moreover, a review of the tax compliance literature (e.g., Song and
Yarbrough, 1978; Hite and Roberts, 1991, 1992; Porcano and Price, 1992)
also shows tax fairness as an inlportant variable that can influence tax
compliance behaviour. However, the findings ofmany ofthe tax compliance
studies in this area are inconsistent. Jackson and Milliron (1986, pp. 137-
138) have suggested that a major reason for this inconsistency is likely to
be the result of the multidimensional nature of f,1irness as a tax compliance
variable. In particular, Jackson and Milliron (1986, p. 137) have argued
that at least two major dimensions of tax fairness exist: the equity of the
exchange relationship between the government and the tax, and the equity
of the taxpayers burden vis-a-vis other taxpayers. Gerbing (1988) later
developed a survey instrument that was designed to supply structure to the
operational definition of tax fairness by identifying the various dimensions
of tax fairness. This research will be considered further below.
410 (2005) 20 AUSTRALIAN TAX FORUM

2.2. TAX FAIRNESS PERCEPTIONS AND TAX COMPLIANCE BEHAVIOUR

It is generally understood that tax £.irness perceptions and ta..'\: compliance

behaviour are related. Specifically, research by Spicer (1974) found a
significant association between ta.." fairness and tax evasion in general, while
Song and Yarbrough (1978) discovered a significant association between
tax fairness and evasion, with 75% of subjects stating that "ability to pay"
was more significant than "benefits". Moreover, Hite and Roberts (1991)
found that most taJ.."payers thought that "mildly progressive tax rates" were
most £ur. Hite and Roberts (1992) also found that fairness was significantly
associated with perceptions ofan improved tax system, and that ta..'\: fairness
and tax evasion were related. Finally, Porcano and Price (1992) discovered
that tax practitioners perceived the tax system as generally fairer than did
individual taxpayers, where "equality" was most frequently related to tax
fairness.
Alternatively, other studies have found no association between tax
fairness perceptions and tax compliance behaviour. For instance, Vogel
(1974) found no significant association between fairness perceptions and
tax evasion. Moreover, Porcano (1988) discovered that that the only tax
fairness dimension that correlated to tax evasion was" exchange with the
government". Finally, Antonides and Robben (1995) have found that
equity considerations were neither directly nor indirectly related to ta..'\:
evasion. However, as was originally suggested byJackson and Milliron (1986,
pp. 137-138) and more recently by Richardson and Sawyer (2001, pp. 180-
181), a credible reason for this inconsistency is the multidimensional nature
of fairness as a tax compliance variable. Therefore, the major purpose of
this study is to investigate further the potential association between ta.."
fairness perceptions and tax compliance behaviour; taking into account the
multidimensional nature of tax fairness.
The above discussion leads to the formulation of the first research
hypothesis eJ.."pressed in alternative form:
HI: There is a significant positive association between perceptions
of tax fairness and tax compliance behaviour in Australia.

2.3. TAX FAIRNESS PERCEPTION DIMENSIONS

Gerbing (1988) represented the first major study which developed

a nl.ultidi.l1lensional model of tax perceptions of fairness. Tax fairness
judgnl.ents, opinions about the fairness of the Tax Reform Act of 1986, and
demographic data were collected by Gerbing (1988) by way of a 56-item
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 411

mail survey of 225 taxpayers in the United States. Factor analysis of the t:L"'\:
fairness judgement data identified five major underlying dimensions of tax
fairness perceptions: general fairness and distribution of the tax burden,
exchange with the government, attitude towards taxation of the wealthy,
preferred tax rate structure and self-interest. Gerbing's (1988) findings
therefore supported the idea that tax fairness was a multidimensional
concept.
In another study, Christensen et al. (1994) identified tax fairness
perception dimensions and determined how education could affect an
individual's perceptions of the identified t:L"'\: fairness dimensions. A refined
survey instrument based on Gerbing (1988) was administered to 296
students enrolled in introductory tax courses at three universities in the
United States. Factor analysis of the questionnaire items identified five
core tax fairness perception dimensions in this research: overall fairness
of the tax system, fairness of personal payment level, exchange with the
government, tax rate structure and fairness of special provisions.
A further study in this area by Christensen and Weihrich (1996)
investigated and compared tax practitioners,' tax auditors' and tax
educators' perceptions of fairness of the Federal income tax system in the
United States. A modified survey instrument based on Gerbing (1988)
was administered to 141 tax practitioners, 186 tax auditors and 165 tax
educators. Factor analysis supported the presence of five major tax f.1irness
perception dimensions: exchange with the government, tax rate structure,
special provisions, overall fairness and personal fairness.
Overall, the results of both the Christensen et al. (1994) and Christensen
and Weihrich (1996) studies are consistent with the tax fairness perception
dimensions that Gerbing (1988) previously identified, which attests to the
soundness of her research. However, this research was conducted wholly
in the United States. From a recent review of the tax literature in this
area, it appears that no studies have been carried out in Australia regarding
this issue (Richardson and Sawyer, 2001;Tan and Sawyer, 2003).Therefore,
a subsidiary purpose of this study is to determine whether Gerbing's
(1988) tax fairness perception dimensions represent universal tax fairness
dimensions across different Western jurisdictions such as the United States
(as identified in previous research) and Australia.
412 (2005) 20 AUSTRALIAN TAX FORUM

2.4. DEMOGRAPHIC VARIABLES AND TAX COMPLIANCE BEHAVIOUR

Jackson and Milliron (1986) have conducted a review of the tax literature
that considered the impact of various demographic variables on the
tax compliance behaviour of individuals in society such as: age, gender,
education and occupation status.
Chronological age of the tax represents one of the most important
demographic variables investigated in the tax literature Oackson and
Milliron 1986, p. 130). Studies in this area have found that older tJ..'\.-payers
are normally more compliant than younger taA-payers (e.g., Tittle, 1980;
Hanno and Violette, 1996). For example, Tittle (1980) found that younger
tJ.."'payers were more risk-seeking, were less sensitive to penalties, and also
reflected the social and psychological differences related to the period in
which they were raised. This discussion leads to the formulation of the
second research hypothesis expressed in alternative form:
H2: There is a significant negative (positive) association between
younger (older) taxpayers and tax compliance behaviour in
Australia.
Another key demographic variable is denoted by gender. Many past studies
have shown a positive association between gender and tax compliance
behaviour with the compliance level offemale taxpayers being higher than
that of male taA-payers (e.g., Vogel, 1974; Mason and Calvin, 1978). Also,
Jackson and Milliron (1986, p. 131) have argued that the gap between
males and females regarding compliance level may be closing over time
as a new generation of liberated women emerges. But, studies in this area
since Jackson and Milliron (1986) tend to show otherwise (e.g., Brooks and
Doob, 1990; Collins et al., 1992). This discussion leads to the formulation
of the third research hypothesis expressed in alternative form:
H3: There is a significant positive (negative) association between
female (male) taxpayers and tax compliance behaviour in
Australia.
Education represents yet another important demographic variable. Jackson
and Milliron (1986, p. 132) have argued that education has two important
elements: the general degree of fiscal knowledge and the specific degree of
knowledge regarding tax evasion opportunities. They claim that enhancing
the level of general fiscal knowledge improves tax compliance by means
of more positive perceptions of taxation, while increased knowledge of tax
------------------------_._--------------

IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 413

evasion opportunities has a negative influence on tax compliance as it assists

non-compliance Oackson and Milliron, 1986, p. 132). Based on the education
characteristics of the participants in the survey sample in tlus study, (see Table
1 below) which assumed no eA1:ensive knowledge ofthe Australian ta.'\: system
and tax evasion opportunities, this discussion leads to the formulation of the
fourth research hypothesis eA'Pressed in alternative form:
H4:There is a sigIuficant positive association between the
education knowledge/level of taA'Payers and tax compliance
behaviour in Australia.
One more notable demograplUc variable is represented by occupation
status, which has been regarded as a key tax compliance variable for many
decades. But, now that income tax laws cover a broad range of occupations,
the association between occupation status and tax compliance behaviour
is not as clear as in the past,l and the research lacks a clear direction. Some
studies have found a positive association between occupation status and
tax compliance behaviour (e.g., Wearing and Headley, 1997), while other
studies have found a negative association (e.g.,Vogel, 1974), and still others
have found no association at all (e.g., Brooks and Doob, 1990). Based on
the past research which does not show a clear direction, tlUs discussion
leads to the formulation of the fifth research hypothesis eA'Pressed in non-
directional form:
H5: There is a significant association between the occupation
status of taA'Payers and tax compliance behaviour in Australia.

3. Research method
3.1. SURVEY PROCEDURE AND SAMPLE

A tax survey questionnaire was adnunistered to a sample ofl05 postgraduate

business students in the context of regular class meetings at an Australian
Uluversity during the later part of the 2003 year. 2 The study was described

Where research by Sutherland (1949) has shown that people in higher status
occupations were found to be less compliant with tax laws than people in lower status
occupations.
2 The survey questionnaire was pilot-tested on five postgraduate business students.
After the pilot testing was carried out, minor alterations were made to the survey
questionnaire to improve its readability and general understanding. This procedme is
consistent with Dillman (2000, pp. 140-147).
414 (2005) 20 AUSTRALIAN TAX FORUM

to students as a survey to evaluate the views ofAustralian taA-payers about

their income tax laws. Participant anonymity was assured by not asking
for personal identification on the survey questionnaires. Also, participants
were notified that neither the class instructor nor the Australian Ta."ation
Office (ATO) would have access to individual answers. In addition, there
was no intention to disguise the fact that this was a tax-focused study. The
participants included in the final sample were required to have some basic
experience in making individual tax compliance decisions and to complete
the survey in a dependable manner. Involvement in the survey was entirely
voluntary, and the participants received no class credit or other rewards for
completing the survey questionnaire. Finally, the sample size of the study
(n = 10S) was found to be comparable to prior research in this area (e.g.,
Roberts, 1994; Hanno andViolette, 1996; Chan et al., 2000).
3.2. SURVEY QUESTIONNAIRE, MEASURES AND DEMOGRAPHIC DATA

The survey questionnaire included the following three sections:

Section 1: tax fairness perceptions section (i.e. items
concerning the tax fairness perceptions ofAustralian ta:h-payers
of the income tax system);
Section 2: ta." non-compliance section (i.e. items about
hypothetical tax non-compliance by Australian ta:h-payers); and
Section 3: demographic section (i.e. items on age, gender,
education and occupation status ofAustralian taxpayers).
A modified version of the Gerbing (1988) ta." fairness perception scale was
used to collect information about tax fairness perceptions of the Australian
income tax system. Altogether, a 1S-item scale was used with S-point "very
fair-very unfair" (3 reverse coded)3 and "strongly disagree-strongly agree"
(12 coded) Likert-scale questions with discrete response categories. The
reliability of the tax fairness scale was assessed using Cronbach's Alpha.
The scale scored .74, which exceeds the nUninllUll acceptable level of .70
recommended by NUJUlally (1978).
In addition, a modified version of the non-compliance scale developed
by Yankelovich et al. (1984) was used to gather data on hypothetical non-

3 These three ta.'{ fairness perception items were bter recoded upon data entry to
be consistent with the other twelve items of the ta.'{ fairness perceptions section of
the survey questionnaire and also to be consistent with the hypothetical ta.'{ non-
compliance/compliance format of the survey questionnaire.
 IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 415

compliance behaviour in Australian in the survey questionnaire. The

modified scale contains four items reflecting rationales for tax cheating.
Five-point Likert scale questions (scaled from strongly agree to strongly
disagree) with discrete response categories were used in the survey
questionnaire regarding this issue. The Cronbach's Alpha for the scale
was .78. The final section of the survey questionnaire asked participants
to complete a series of demographic questions concerning age, gender,
education and occupation status. These demographic characteristics of the
sample are reported in Table 1.

Table 1: Summary of Demographic Data

Variable Responses Percent (%)
Age
Under 20 0 0
20·29 65 61.9
30·39 23 21.9
40-59 15 14.3
60 or over 2 1.9
Total 105 100
Gender
Male 54 51.4
Female 51 48.6
Total 105 100
Education Years (starting with primary school)
I I years or less 3 2.9
12-13 years 4 3.8
14-15 years 16 15.2
16-17 years 37 35.2
18 years or over 45 42.9
Total 105 100
Occupation Status
No paid job (including full-time students) 4 3.8
Unskilled or semi-skilled manual worker 9 8.6
Generally trained office worker or secretary 22 20.9
Vocationally trained person 3 2.9
Academically trained professional or equivalent (but non-
40 38.1
managers)
Supervisor of one or more subordinates (Le. non-managers) 21 20.0
Manager of one or more managers 6 5.7
Total 105 100
416 (2005) 20 AU5TRALlANTAX FORUM

Concerning gender, 51.4% of the survey respondents were male, while

48.6% of the survey respondents were female. Moreover, a majority 01
the sample consisted of people with an age in the range of20-29 (61.9%)
an education level of over 16 years (combining two education levels
totaling 78.1%), and who were in full-time employment (96.2%) as eithel
academically trained professionals or supervisors/managers (combining
three categories totaling 63.8%). These demographic data show that the
participants were generally younger, well-qualified and paid personal
income tax. Finally, the 15-item tax fairness perception scale and the 4-
item non-compliance scale are reported in Appendix A and B of the paper,
together with the means and standard deviations for the individual items
that comprise· each of the two scales.

4. Results
4.1. FACTOR ANALYSIS OF TAX FAIRNESS PERCEPTIONS
To measure and empirically verify the tax fairness perceptions, a correlation
matrix~ was computed and principal component factor analysis (with
varimax rotation) was then utilised to summarise the structure of the 15-
item tax fairness scale. The results of the factor analysis are reported in
Table 2.
The factor analysis identified the presence offive tax fairness perception
dimensions (with eigenvalues > 1).5 Overall, the dimensions accounted for
64.20% of the total variance. The five dimensions 6 (in decreasing order of
importance) are represented by:
• Dimension 1: general fairness, which accounts for 21.50%
of the variance. This dimension consists of three items that
provide a general representation of the overall fairness of the
Australian tax system. This dimension is composed of questions
that relate to fairness for the average tax taxpayer, fairness for
the ta:l\.-payer and fairness of the distribution of the ta..x burden;

-I The Bartlett test ofsphericity (Chi-square = -120.31) was significant at p = .00 and the
Kaiser-Meyer-Olkin measure of sampling adequacy was = .67, denoting a high level
of factorability of the correlation matrix (Hair et aI., 1998, pp. 99-100).
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 417

Table 2: Factor Analysis Results for Tax Fairness

Perceptions
Question Dimension 1 Dimension 2 Dimension 3 Dimension 4 Dimension 5
02 .90
01 .85
03 .75
012 .83
010 .82
011 .81
013 .87
015 .83
014 .66
07 .72
06 .66
05 .47
08 .85
09 .62
Eigenvalue 3.22 2.24 1.75 1.40 1.02
Percent of
21.50 14.90 11.70 9.30 6.80
Variance
Cumulative
21.50 36.40 48.10 57.40 64.20
Percent
Coefficient
.81 .88 .78 .75 .73
Alpha

Notes: Dimension 1 = general fairness, Dimension 2 = ta.'!: rate structure, Dimension 3

= exchange with the goverlUl1ent, Dimension 4 = self-interest and Dimension 5 =
fairness of special provisiol1S. Only dimension loadings > 040 are displayed.

Dimension 2: tax rate structure, which accounts for 14.90%

of the variance. This dimension comprises three items that
are concerned with the ta." rate structure of the Australian tax

5 Hair et al. (1999, p. 103) suggests that factors having eigenvalues greater-than 1 are
considered to be signiticant, while all factors with eigenvalues less-than 1 are regarded
as insignificant and should be disregarded. This process was applied here, indicating that
a five-factor solution was most appropriate. Also, visual inspection of the Scree plot of
the eigenvalues confirms the presence of five dimensions.
6 Hair et al. (1999, p. 111) advocates that factor loadings greater-than 040 are considered
to meet an acceptable level ofsignificance to interpret factors. Hence, this cut-off point
was used for evaluating the factor loadings for the five dimensiol1S. This cut-off point
is also consistent with recent ta.'!: research by Murphy (2004, p. 320).
418 (2005) 20 AUSTRALIAN TAX FORUM

system. This dimension is made' up of questions that relate to

ability to pay, progressive tax rates and proportional tax rates;
Dimension 3: exchange with the Government, which accounts
for 11.70% of the variance. This dimension consists of three
items that directly relate to the benefits received by Australian
ta.."payers from the Australian Federal Government in exchange
for the taxes paid in the tax system;
• Dimension 4: self-interest, which accounts for 9.30% of
the variance. This dimension comprises three items related
to whether the amount of tax the individual Australian tax
personally pays is too high both in general terms and vis-a-vis
other Australian taxpayers; and
Dimension 5: fairness of special provisions, which accounts
for 6.80% of the variance. This dimension contains two items
which all deal with special tax provisions that are accessible to
only a lim.ited number ofAustralian taxpayers. 7
The five dimensions were then tested for reliability using coefficient alpha.
The coefficient alphas reported in Table 2 show that all five dimensions
exceed .70, which is the level of reliability recomm.ended by Nunnally
(1978) for eAl'loratory studies. In general, the results of this research are
consistent with the tax fairness perception dimensions that were identified
in Gerbing's (1988) research. Thus, it appears from this research that
Gerbing's (1988) tax fairness perception dimensions represent universal
tax fairness perception dimensions across different Western jurisdictions,
including Australia.
4.2. INFLUENCE OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX
COMPLIANCE BEHAVIOUR

(i) Tax compliance behaviour measurement and verification

As mentioned earlier, a modified version of the non-compliance scale
developed by Yankelovich et al. (1984) was used to collect data about
hypothetical tax non-compliance behaviour in Australia (i.e. four items
dealing with tax cheating rationales). The reliability of the 4-item non-
compliance scale was found to be satisfactory (Cronbach's alpha = .78).A

7 One item that did not load on to any of the factors was item 4, which deals with
"personal fairness of the tax system." It had a factor loading of less-than the cut-oft-
point of 040, which is not acceptable for further analysis.
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 419

correlation matriXl was then computed and principal component factor

analysis was carried out to check the underlying factor structure of the
scale. A single factor solution was found to be the most appropriate, which
is consistent with prior research (e.g., Roberts, 1994, p. 75). It accounted
tor 60.10% of the variance and had an eigenvalue of2.40.The factor scores
from this single factor solution of the 4-item non-compliance scale will
be used as the measure of ta.>: compliance behaviour (i.e. the dependent
variable) in the statistical analysis that immediately follows.
(ii) Summary descriptive statistics and univariate tests
Sununary descriptive statistics for the tax fairness perception and tax
compliance behaviour variables are presented in Table 3, while the
intercorrelations among the variables are reported in Table 4.

Table 3: Descriptive Statistics

Tax Fairness Perception Dimensions and Tax Compliance
Behaviour
Actual Range Theoretical Range
Standard
Variable Mean Min Max Min Max
Deviation
GENF 0 1.00 -2.02 2.38 1.00 5.00
TRATE 0 1.00 -2.66 2.60 1.00 5.00
EXCH 0 1.00 -2.64 1.75 1.00 5.00
SELFI 0 1.00 -2.97 1.70 1.00 5.00
SPECP 0 1.00 -2.28 3.16 1.00 5.00
TCOMP 0 1.00 -2.13 2.81 1.00 5.00
Notes: GENF = general fairness, TRATE = ta.'C rate structure, EXCH = exchange with
the government, SELFI = self-interest, SPECP = fairness of special provisions and
TCOMP = ta.'C noncompliance.

8 The Bartlett test of sphericity (Chi-square = 109.40) was signiticant at p = .00 and the
Kaiser-Meyer-Olkin measure of sampling adequacy was = .75, suggesting a high level
of factorability of the correlation matrix.
420 (2005) 20 AUSTRALIAN TAX FORUM

Table 4: Pearson Correlation Matrix

Tax Fairness Perception Dimensions and Tax Compliance
Behaviour
Variable GENF TRATE EXCH SELFI SPECP TCOMP
GENF 1.00
TRATE 1.00
EXCH 1.00
SELFI 1.00
SPECP 1.00
TCOMP -.03 .17** -.0 I .23~~=I< .03 1.00
Notes: GENF = general fairness, TRATE = tax rate structure, EXCH = exchange with
the government, SELFI = self-interest, SPECP = fairness of special provisions and
TCOMP = ta..'C noncompliance.
*, **, *** p < .10 one-tailed test, p < .05 one-tailed test, p < .01 one-tailed test,
respectively.

The results reported in Table 4 show that two of the tax fairness dimensions
are significantly correlated with tax compliance behaviour (with predicted
signs). First, the tax rate structure dimension is significant at the p < .05
level. Second, the self-interest dimension is significant at the p < .01 level.
. None of the other tax fairness dimensions were found to be significantly
correlated to tax compliance behaviour on a bivariate basis. These results
provide some preliminary support for hypothesis one. However, the results
of the Ordinary Least Squares (OLS) multiple regression analysis should
also be considered.
(ill) Multivariate tests
To consider the potential assoCIatIOns between the five tax fairness
perception dimensions and ta." compliance behaviour, the data were
analysed using OLS multiple regression analysis. 9 Therefore, the following
regression model is estimated for each survey participant i:
TCOMPj = 0.0 + ~lGENFi + ~2TRATEi + ~3EXCHj + ~-ISELFIj +
~5SPECPi + £j (1)
9 Diagnostic tests were carried-out to ensure that the assumptions for the use of OLS
multiple regression analysis were satistied. Specifically, the normal probability plot of
residuals showed that the normality assumption was fulfilled. The plots of the residuals
against the corresponding titted (predicted) values showed that the assumptions of
homogeneity of variance of residuals and the propriety of the linear models were not
violated. Finally, the variance inflation factors indicated that none of the independent
variables had a multicollinearity problem.
 IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 421

The dependent variable, TCOMP j ,lO is the 4-item noncompliance scale

factor score, GENF j is the general fairness dimension score, TRATE j is
the tax rate structure dimension score, EXCH j is the exchange with the '
government dimension score, SELFI j is the self-interest dimension score,
SPECP j is the fairness of special provisions dimension score, and t j is
the residual term. The results of the OLS multiple regression analysis are
reported in Table 5.

Table 5: OLS Regression Model Results

Tax Fairness Perception Dimensions Model
Variables Predicted Sign Unstandardised Standard Errors T-statistics
Beta Coefficients
GENF + -.03 .10 -.30
TRATE + .17 .10 1.70"*
EXCH + -.01 .10 -.10
SELFI + .24 .10 2.40**1<
SPECP + .03 .10 .30

F statistic 1.83
P value p < .05
Adjusted R2 .10
Notes: GENF = general fairness, TRATE = ta.'C rate structure, EXCH = exchange with
the government, SELFI = self-interest a.nd SPECP = fairness of special provisions.
*, **, *** p < .10 one-tailed test, p < .05 one-tailed test, p < .01 one-tailed test,
respectively.

Table 5 shows that the regression model is significant at the p < .05 level
(F Statistic = 1.83). In addition, the adjusted R2 of the regression model
is .10. The regression model's explanatory power is relatively 10w,1I yet this
result is not surprising as Jackson and Milliron (1986, p. 126) have suggested
that there are at least 14 key variables that can have some influence on ta.."\:
compliance behaviour, while so far, this study has focused only on one:
tax fairness. Including some other key (demographic) variables in another

10 Another regression model was estimated using a sununated scale measure ofTCOMP
as the dependent variable in keeping with Hanno and Violette (1996). These results
were found to be comparable to the results reported in Table 5, hence, these alternate
results will not be presented.
11 This is also consistent with the results found in other past regression modeling research
(e.g., Elfers et al., 1992, p. 563; Murphy, 200-1, p. 320).
422 (2005) 20 AUSTRALIAN TAX FORUM

regression model could improve the explanatory power. This issue will be
addressed below.
Table 5 also shows that two of the tax fairness dimensions are significant
in the regression model (with predicted signs). First, the tax rate structure
dimension is significant at the p < .05 level. This result is consistent
with the findings of prior studies that have found positive associations
between tax rate structure and tax compliance behaviour (e.g., Hite and
Roberts, 1991). Second, the self-interest dimension is significant at the p
< .01 level. It seems that self-interest influences how individual taxpayers
respond to tax compliance or non-compliance. Hence, where individual
tah-payers perceive that their personal tax interests are not compromised,
they are more likely to comply with tax laws. None of the other three tax
fairness dimensions are found to be significant, thus, hypothesis one is only
partially supported by the results. From these results it appears that while
tax fairness is a multidimensional concept, it only has varying effects on
tax compliance behaviour. These results provide compelling support for
Jackson and Milliron's (1986, pp. 137-138) view that the inconsistent past
research fmdings in this area might be due to the multidimensional nature
of tax fairness as a tax compliance variable.

4.3. IMPACT OF DEMOGRAPHIC VARIABLES ON TAX COMPLIANCE BEHAVIOUR

(i) Demographic variable specification

Demographic data relating to age, gender, education and occupation
status were collected in the survey questionnaire to consider the impact
of demographic variables on tax compliance behaviour. As they represent
non-metric data, they must be converted to dununy variables to be used in
OLS multiple regression analysis (Hair et al., 1998, p. 167) as follows:
Age is denoted by two dununy variables, representing two
of the major age groups in the survey sample (1 if the survey
participant falls in the particular age group, 0 otherwise). These
two major age groups are: 20-29 and 30-39. The under 20, 40-
59 and 60 or over age groups were excluded from the analysis
due to small sample sizes;
Gender is represented as a single dununy variable (1 if the
survey participant is female, 0 otherwise);
Education is denoted by two dununy variables, signifying two
of the major education classifications in the survey sample
(1 if the survey participant falls in the particular education
 IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 423

classification, 0 otherwise). These two major education

classifications are the education groups: 16-17 years and 18
years or over. Education groups with small sample sizes (i.e. 11
years or less, 12-13 years and 14-15 years) were excluded 6:om
the analysis; and
Occupation status is represented by a series of dwruny variables
representing three of the major employment classifications
in the survey sample (1 if the survey participant falls in the
particular employment group, 0 otherwise).These three major
occupation status classifications are: generally trained office
worker or secretary, academically trained professional or
equivalent (but non-managers) and supervisor of one or more
subordinates (i.e. non-managers). The occupational groups
represented by: unskilled or semi-skilled manual workers,
vocationally trained persons and manager of one or more
managers were excluded from the analysis due to small sample
sizes. Finally, the no paid job (including full-time students)
occupational group was also excluded from the analysis as this
specific group of people was not likely to have paid personal
income taxes during the survey period.
(ii) Summary descriptive statistics and univariate tests
Sununary descriptive statistics for the demographic variables are presented
in Table 6, while the intercorrelations between the demographic variables
and tax compliance behaviour are shown in Table 7.

Table 6: Descriptive Statistics

Demographic Variables
Actual Range Theoretical Range
Standard
Variable Mean Min Max Min Max
Deviation
AGEI .62 .49 0 0
AGE2 .22 .42 0 0
GEND .49 .SO 0 0
EDUCI .3S .48 0 0
EDUC2 .42 .50 0 0
oceul .21 .41 0 0
oceU2 .38 .49 0 0
oceU3 .20 .49 0 0
424 (2005) 20 AUSTRALIAN TAX FORUM

Notes: AGE 1 = 20-29 age group,AGE2 = 30-39 age group, GEND = gender, EDUC1 =
16-17 years education group, EDUC2 = 18 years or over education group, OCCU1
= generally trained office worker or secretary group, OCCU2 = academically trained
professional or equivalent (but non-managers) group and OCCU3 = supervisor of
one or more subordinates (i.e. non-managers) group.

Table 7: Pearson Correlation Matrix

Demographic Variables and Tax Compliance Behaviour
Variable AGE I AGE2 GENO EOUC I EOUC2 OCCU I OCCU2 OCCU3 TCOMP
AGEI 1.00
AGE2 -.68*** 1.00
GEND .06 -.10 1.00
EDUCI .13* -.10 .08 1.00
EDUC2 -.09 .1 I -.0 I .63:1=1cI' 1.00
OCCU I .26*** -.21 *** -.1 I -.04 -.06 1.00
OCCU2 -.19** .22 -.02 -.05 .05 -.41 *** 1.00
OCCU3 -.25**1< .31- -.10 -.02 .06 -.26*** _.39*'1--1< 1.00
TCOMP -.29*** .25*** -.07 .06 .0 I -.25ttt .12 .12 1.00
Notes:AGE1 = 20-29 age group,AGE2 = 30-39 age group, GEND = gender, EDUC1 =
=
16-17 years education group, EDUC2 18 years or over education group, OCCU1
= generally trained oftice worker or secretary group, OCCU2 = academically trained
professional or equivalent (but non-managers) group,OCCU3 = supervisor of one
or more subordinates (i.e. non-managers) group and TCOMP = ta." noncompliance.
*, **, *** p < .10 one-tailed test, p < .05 one-tailed test, p < .01 one-tailed test,
respectively.
t, tt, ttt p < .10 two-tailed test, p < .05 two-tailed test, p < .01 two-tailed test,
respectively.

The results in Table 7 show that three of the eight demographic variables
are significantly correlated with tax compliance behaviour. First, the 20-
29 years age demographic variable is significant at the p < .01 level (with
predicted sign). Second, the 30-39 years age variable is also significant at the
p < .01 level (with predicted sign). These results provide some preliminary
support for hypothesis two. Finally, the generally trained office worker
or secretary occupation status demographic variable is significant at the
p < .01 level (with no predicted sign). Tllis result provides some initial
support for hypothesis five. None of the other demographic variables were
found to be significant.
(iii) Multivariate tests
To investigate the potential associations between the demograpllic variables
(in conjunction with the tax fairness perception dimensions) and ta.."
 IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 425

compliance behaviour, the following OLS regression model is estimated

for each survey participant i:
TCOMP j = U o + ~lGENFj + ~2TRATEj + ~3EXCHj + ~4SELFIj +
~5SPECPj + ~6AGEli + ~7AGE2j + ~8GENDj + ~9EDUCli + ~loEDUC2j
+ ~lIOCCUli + ~J20CCU2j + ~130CCU3j + Cj (2)
The dependent variable, TCOMPj, 12 is the 4-item noncompliance scale
factor score, GENFj is the general fairness dimension score, TRATEj is
the tax rate structure dimension score, EXCH j is the exchange with the
government dimension score, SELFI j is the self-interest dimension score,
SPECPj is the fairness ofspecial provisions dimension score,AGEjis a series
of dummy variables representing two age groups in the survey sample (1 if
the survey participant falls in the particular age group, 0 otherwise), GEND j
is a dunU11y variable (1 if the survey participant is female, 0 otherwise),
EDUC j is a series ofdununy variables denoting two of the major education
classifications in the survey sample (1 if the survey participant falls in the
specific education classification, 0 otherwise), OCCU j is a series of dununy
variables representing three of the major employment classifications in the
survey sample, (1 if the survey participant falls into the specific occupation
status, 0 otherwise) and Cj is the residual term. The results of the OLS
regression analysis are reported in Table 8.
Table 8 shows that the regression model is significant at the p < .05 level
(F Statistic = 1.73). Moreover, the adjusted R 2ofthe regression model is .19.
This represents a major improvement in the regression model's eA-planatory
power fi:om the first regression model (see equation 1 above). Regarding
the significance of the tax fairness dimensions in the regression model,
Table 8 shows that two of them are significant (with predicted signs): the
tax rate structure dimension which is significant at the p < .05 level and
the self-interest dimension which is significant at the p < .01 level. These
results are consistent with the initial regression model findings and are not
sensitive to Australian taA-payer demographics. Hence again, hypothesis one
is only partially supported by the results.

12 See footnote 10 obove.

426 (2005) 20 AUSTRALIAN TAX FORUM

Table 8: OLS Regression Model Results

Tax Fairness Perception Dimensions/Demographic
Variables Model
Variables Predicted Sign Unstandardised Standard Errors T-statistlcs
Beta Coefficients
GENF + -.04 .10 -.40
TRATE + .17 .10 1.70**
EXCH + -.04 .10 -.40
SELFI + .21 .10 2.10-
SPECP + -.05 .10 -0.50
AGEI -.36 .27 -1.33*
AGE2 + .19 .32 .59
GEND + -.02 .20 -.10
EDUCI + .35 .27 1.30*
EDUC2 + .22 .26 .85
OCCUI -.32 .31 -1.03
OCCU2 .11 .27 .40
OCCU3 .06 .32 .19

F statistic 1.73
P value p < .05
Adjusted R2 .19
Notes: GENF = general fairness, TRATE = ta.'I: rate structure, EXCH = exchange with
the government. SELFI = self-interest. SPECP = fairness of special provisions.AGE1
= 20-29 age group,AGE2 = 30-39 age group. GEND = gender. EDUC1 = 16-17
years education group. EDUC2 = 18 years or over education group. OCCU1 =
generally trained office worker or secretary group. OCCU2 = academically trained
professional or equivalent (but non-managers) group and OCCU3 = supervisor of
one or more subordinates (i.e. non-managers) group.
*. **. *** p < .10 one-tailed test. p < .05 one-tailed test. p < .01 one-tailed test.
respectively.

Concerning the significance of the demographic tax compliance variables,

Table 8 shows that two of them are statistically significant (with predicted
signs), but only at the p < .10 level. Specifically, in relation to the age
dummy variables, the 20-29 age dummy variable is marginally significant
at the p < .10 level, which is consistent with the findings of prior studies
that show that younger taxpayers are usually less compliant that older
taxpayers (e.g., Hanno andViolette, 1996). However, the 30-39 age dummy
variable is not significant, hence, hypothesis two is only partially supported
by the results. For the gender dummy variable, tllls is not significant, hence,
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 427

hypothesis three is not supported by the results and is rejected.With respect

to the education dununy variables, the 16-17 years education dununy
variable is marginally significant at the p < .10 level, which is consistent
with prior research findings (e.g., Wearing and Headley, 1997). But, the
18 years or over dununy variable is not significant, thus, hypothesis four is
not fully supported by the results. Finally, for the occupation status dununy
variables, none of them were found to be significant, hence, hypothesis
five is not supported by the results and is rejected. In general, the results
concerning the demographic variables are marginal. Only partial support
is found for hypothesis two and hypothesis four, while hypothesis three
and hypothesis five are rejected. But, it should be noted that these results
are similar to those obtained in prior studies as observed by Jackson and
Milliron (1986) and Richardson and Sawyer (2001).

5. Conclusions and limitations

The major purpose of this study was to investigate the impact of tax
fairness perception dimensions on tax compliance behaviour in Australia.
The results showed that tax fairness perception dimensions relating to
ta..'C rate structure and self-interest had significant associations with tax
compliance behaviour. Though, none of the other tax fairness perception
dimensions were found to be significant. Hence, hypothesis one was only
partially supported by the results. From these findings it seems that while
tax fairness is a multidimensional concept, it only has varying effects on tax
compliance behaviour in Australia. This represents an important empirical
finding not evident in previous research. This might help to e1\.-plain the
inconsistent research findings concerning the association between tax
fairness perceptions and tax compliance behaviour in the past. Future
research about this issue could be undertaken in otherWestern jurisdictions
to substantiate the results found in this section of the study.
Another purpose of this study was to determine whether Gerbing's
(1988) tax fairness perception dimensions represented universal tax fairness
dimensions across different Western jurisdictions such as Australia. On
the whole, the results were fairly consistent with the major tax fairness
perception dimensions that were originally identified in Gerbing's (1988)
research. It seems that Gerbing's (1988) tax f.1irness perception dimensions
represent universal tax fairness perception dimensions across different
Western jurisdictions. Again, future research concerning this issue could be
428 (2005) 20 AUSTRALIAN TAX FORUM

pelformed in other Western jurisdictions to corroborate the results found

in this part of the study.
The fmal purpose of this study was to investigate the impact of
demographic variables on tax compliance behaviour in Australia. While
the results for the tax fairness dimensions were consistent with the initial
regression model findings outlined above, the demographic variable results
were found to be lacking. Only two of the eight demographic variables (i.e.
those relating to the 20-29 age group and the 16-17 years education group)
were found to be statistically significant. Hence, only hypothesis two and
hypothesis four were partially supported by the results, while hypothesis
three and hypothesis five were rejected. It seems that demographic variables
only have a minor impact on tax compliance behaviour in Australia.This is
an important empirical finding which is consistent with previous research
in tills area. Future research about this issue could be undertaken in other
Western jurisdictions to confirm the results found here.
Overall, the empirical findings of this study emphasise an important idea
originally advanced by]ackson and Milliron (1986, p. 126). Specifically, that
tax compliance behaviour is a multifaceted concept where many factors
such as behavioural, demographic and economic factors are likely to have
an impact on the tax compliance behaviour decisions of individuals. These
factors either alone or together are likely to have variable inlpacts on tax
compliance behaviour, and these various impacts should be investigated
carefully. It is hoped that this study presents some early support for this
important idea.
The study has several limitations. First, misunderstood questions could
affect the validity of the results (Dillman, 2000). Pilot testing and modifying
questionnaires used in previous research alleviated but did not necessarily
eliminate this potential problem in the research design.A second limitation
is that the survey participants were all postgraduate business students and
hence, the results may not be generalisable to the Australian ta..'\: population
as a whole. However, prior research (e.g., Dyckman, 1964; Hofstedt, 1972;
LaTour et al., 1990) has found no significant differences in decision making
involving students and other types of survey participants. Also, much of the
past research in this area (e.g., Christensen et aI., 1994; Christensen and
Weihrich, 1996; Tan, 1998; Chan, 2000) has successfully used university
students as survey participants without prejudicing the results. Indeed,
given the research fimding constraints for this study, it became necessary
to use tax-paying postgraduate business students as the survey participants.
 IMPACT OF TAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 429

A third limitation is that while tlus study focused on the five tax £1irness
dimensions identified by Gerbing (1988), there could be other dimensions
that were not identified by this study. Future research could be attempted
in other jurisdictions to see if any other tax fairness perception dimensions
exist and how these other dimensions affect tax compliance behaviour.
A fourth linutation is that the tax compliance behaviour of the survey
participants was measured in terms of hypothetical tax compliance
behaviour instead of actual non-compliance behaviour. But, prior research
(e.g., Hite, 1988; Roberts, 1994; Hanno and Violette, 1996; Chan et al.,
2000) has shown that the hypothetical tax compliance behaviour measures
are a reliable substitute for actual non-compliance behaviour ofindividuals.
In fact, information provided by subjects on actual compliance behaviour
is found to be sensitive and potentially incrinunating, and likely to be
nusrepresented by taxpayers (Hessing et al., 1988).
Despite these linutations, it is suggested that tlus study has made a
novel contribution to the sparse empirical ta..'\: compliance literature in a
jurisdiction outside of the United States. The study has achieved this in a
number ofways. First, it considered the existence of tax fairness perception
dimensions in Australia. Second, it investigated associations between tax
fairness perception dimensions and tax compliance behaviour in Australia.
Third, it exanuned the impact of some key demographic variables on
tax compliance behaviour in Australia. Future research is encouraged in
tlus area in other jurisdictions to assist cross-culture comparisons, and to
obtain a better understanding of how the key tax compliance variables
influence the tax compliance behaviour of individual taxpayers in different
jurisdictions.
430 (2005) 20 AUSTRALIAN TAX FORUM

Appendix A

Extracts from the IS-Item Tax Fairness Perceptions Scale

Here are some questions concerning personal attitudes towards income
taxes and the income tax system. (Please circle one answer in each line
across as to how you feel about income taxes and the income tax system):
1 =Very fair; 2 = Fair; 3 = Neither fair nor unfair; 4 = Unfair; or 5 =Very
unfair.
1. For the average tax:, I think that the income ta.'( system is: (1) very fair ... (5)
very unfair [mean = 2.94; standard deviation = 1.01].
2. For me personally, I believe that that the income ta.'( system is: (1) very fair ...
(5) very unfair [mean = 2.90; standard deviation = 1.94].
3. Generally, I believe that the manner in which the income ta.'( burden is
distributed across taxpayers is: (1) very fair ... (5) very unfair [mean = 2.57;
standard deviation = .98).

Here are some more questions concerning personal attitudes towards

income taxes and the income tax system. (Please circle one answer in each
line across as to how you feel about income taxes and the income tax
system): 1 = Strongly disagree; 2 = Disagree; 3 = Neutral; 4 = Agree; or 5
= Strongly agree.
4. I believe that the income ta.'( system is the fairest kind of system that the
goverrunent could use to collect revenue: (1) strongly disagree ... (5) strongly
agree [mean = 2.93; standard deviation = 1.02].
5. Current ta.'( laws require me to pay more than my fair share of income taxes:
(1) strongly disagree ... (5) strongly agree [mean = 3.17; standard deviation =
1.08].
6. Fairness requires that different kinds of income such as wages, interest and
income from investments should all be ta.'(ed the same way: (1) strongly disagree
... (5) strongly agree [mean = 2.70; standard deviation = 1.15].
7. People whose income is about the same as mine should pay the same amount
of income tax, regardless of what kind of investments they make, how many
dependents they have or what their other financial obligations are: (1) strongly
disagree ... (5) strongly agree [mean = 2.94; standard deviation = 1.22].
8. The ta.'( system provides big breaks for the undeserving: (1) strongly disagree ...
(5) strongly agree [mean = 3.24; standard deviation = 1.04].
9. Special provisions in the income tax law that apply to only a few people
are unfair: (1) strongly disagree ... (5) strongly agree [mean = 3.15; standard
deviation = .97].
 IMPACT OFTAX FAIRNESS PERCEPTION DIMENSIONS ON TAX COMPLIANCE BEHAVIOUR 431

10. High income earners have a greater ability to pay income ta.'Ces, so it is fair
that they should pay a higher rate of tax than low income earners: (1) strongly
disagree ... (5) strongly agree [mean = 3.27; standard deviation = 1.21].
11. It is fair that high income earners pay proportionately more ta.'C than low
income-earners. For example, if someone earning $100,000 pays 20% in ta.'Ces
($20,000), then someone earning $20,000 should pay less than 20% in ta.'Ces
(less than $4,000): (1) strongly disagree ... (5) strongly agree [mean = 3.57;
standard deviation = 1.08].
12. A fair ta.'C rate should be the same for everyone, regardless of their income, for
example, if one person pays a 14% ta.'C rate, everyone should pay a 14% ta.'C rate,
whether they are wealthy or poor: (1) strongly disagree ... (5) strongly agree
[mean = 3.27; standard deviation = 1.21].
13. I get fair value for my income ta.'C dollars in terms ofbenefits received from the
government: (1) strongly disagree ... (5) strongly agree [mean = 2.58; standard
deviation = 1.05].
14. The income ta.'Ces that I have to pay are unreasonably high considering the
benefits provided by the government: (1) strongly disagree ... (5) strongly agree
[mean = 3.8; standard deviation = 1.0].
15. The benefits I receive from the government in exchange for my income ta.'C
dollars are reasonable: (1) strongly disagree ... (5) strongly agree [mean = 2.78;
standard deviation = .89].

Appendix B

Extracts from the 4-Item Non-Compliance Scale

Here are a number of statements that reflect what some people think
about certain aspects of taxation, especially income taxes. (Please circle
one answer in each line across as to how you feel about certain aspects of
taxation): 1 = Strongly agree; 2 = Agree; 3 = Neutral; 4 = Disagree; or 5
= Strongly disagree.
1. Since a lot of rich people pay no ta.'Ces at all, if someone like me underpays a
little, it's not a big deal: (1) strongly agree ... (5) strongly disagree [mean = 3.08;
standard deviation = 1.23].
2. Ta.'C rates are just too high, so it is not really cheating when you find ways to
pay less tax than you are supposed to: (1) strongly agree ... (5) strongly disagree
[mean = 3.23; standard deviation = 1.07].
3. When you are not really sure whether or not you deserve a tax deduction, it
makes sense to take a chance and take a deduction anyway: (1) strongly agree
... (5) strongly disagree [mean = 3.28; standard deviation = 1.17].
432 (2005) 20 AUSTRALIAN TAX FORUM

4. With what things cost these days, it is okay to cut a few corners on your ta.'\{
returnjust to help pay the bills: (1) strongly agree ... (5) strongly disagree [mean
= 3.25; standard deviation = 1.06].

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