Trust and tax morale

This empirical chapter examines the relation between trust and tax morale at both country and individual levels using a combined World Values Survey and European Values Study dataset covering 400,000 observations across 108 countries. The results overall indicate that although vertical trust matters, horizontal trust in the form of generalized trust is not linked to tax morale. We do, however, identify intercountry differences that warrant further exploration. We also demonstrate that generalized trust uncertainty, in contrast to vertical trust uncertainty, is negatively correlated with tax morale. Lastly, we provide some evidence that generalized trust varies under different vertical and governance conditions, but we are unable to identify any indirect path from generalized trust to tax morale using governance quality as a mediator.