WHO RESPONDS TO CHANGES IN TAXATION - THE RELATIONSHIP BETWEEN TAXATION AND INCENTIVE TO WORK

A questionnaire survey of workers in the south-west of England (n = 153) investigated predictors of responsiveness to tax rate changes. The categories of independent variables included in multiple regression analyses included demographic factors, work attitude measures and political preferences. Whether individuals were paid for overtime, how important they felt physical conditions of work were and the value they placed on leisure were the most important in predicting responsiveness to tax changes (the work attitude measures made no significant contribution). Subsequent in-depth interviews with a small sample of respondents who were responsive to tax changes suggested further factors that need to be taken into consideration, most notably the notions of fairness and existing commitments, and the need to consider alternative responses to tax increases (evasion, asking for a rise).