Journal of Applied Economic Research
ISSN 2712-7435
The Influence of the Behavior of Economic Agents in a Decentralized Tax System on the Ransformation of the Institutional Environment
Molodykh V.A., Rubezhnoy A.A.
Abstract
The transformation of the current tax system requires taking into account different types of behavior of taxpayers, characterized by different reaction to the actions of the state in the process of realization of control functions. The aim of the study is to develop a model of optimal strategy selection for the taxpayer to overcome institutional traps and assess the potential of the national tax system to move to a new qualitative level of development. The methodological basis for the study was provided by the background of the neoclassical theory describing the traditional paradigm of tax administration that is integrated into behavioral economics, which allowed us to consider relationships within the tax system as a situation of a social dilemma with individual interests. The proposed model is based on the mathematical apparatus of game theory with nature, the modeling of the mechanism of overcoming institutional traps in the tax system carried out with regard to their functional properties on the basis of the law of hierarchic compensations and the concept of path dependence. The simulation results show that maximizing the state's control functions of the tax system leads to the fact that an increase in its efficiency is possible only through an extensive growth of regulatory bodies. The optimal policy would be a partial replacement of the control functions of the state with coordination executed by autonomous self-organizing groups of taxpayers that formed as a result of the growth of entropy of the tax system. One can change the forms of tax control as regards the implementation of procedures of "horizontal monitoring" of "fair play initiatives", loyalty and trust through the introduction of strategies of cooperation between taxpayers and the regulatory authorities. It is important to note that taking into account present-day specifics of the existing relationships and the accumulated negative experience of cooperation in the tax area did not provide enough prerequisites and incentives for taxpayers to fully and timely to pay legally established taxes. Therefore, it is necessary to use a combined approach which is based on a cooperative strategy of self-regulation, and - as an exceptional measure - to use tough sanctions in order to counter deviant behaviour.
Keywords
Tax policy; behavior; taxpayer; control; institutional traps; evasion; administration.
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About Authors
Molodykh Vladimir Anatolievich – Candidate of Economic Sciences, Associate Professor, Department Tax Policy and Customs Affairs, North-Caucasian Federal University, Stavropol, Russia (355009, Stavropol, Pushkina Street, 1); e-mail: v.a.molodyh@yandex.ru.
Rubezhnoy Andrey Alexandrovich – Candidate of Economic Sciences, Associate Professor, Department Tax Policy and Customs Affairs, North-Caucasian Federal University, Stavropol, Russia (355009, Stavropol, Pushkina Street, 1); e-mail: aaru@inbox.ru.
For citation
Molodykh V.A., Rubezhnoy A.A. The Influence of the Behavior of Economic Agents in a Decentralized Tax System on the Transformation of the Institutional Environment. Bulletin of Ural Federal University. Series Economics and Management, 2017, Vol. 16, No. 5, 709-726. DOI: 10.15826/vestnik.2017.16.5.034.
Article info
Received August 17, 2017; Accepted September 28, 2017.
DOI: http://dx.doi.org/10.15826/vestnik.2017.16.5.034
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