“Ain’t That a Shame”: The Moral Psychology Behind Tax Evasion and Benefit Fraud

Cu Gáy

26-03-2025 

“Commonly, those with some authority in life would like to spew philosophy. Older guys have loud mouths and often force others to listen to them. 
Kingfisher has also developed this nonsense philosophizing habit as he is old enough and wise enough. He often says: 
– All things pertaining to birds, no matter how vexing, Kingfisher can always explain.”

In“Conductor”; Wild Wise Weird [1]

Why do some people bend the rules when it comes to taxes or benefits while others play by them—even when no one’s watching? A recent study by Barile, Cullis, and Jones [1] explores this question by looking beyond financial incentives to the moral costs of fiscal crimes like tax evasion and benefit fraud.

Economic models have long assumed that people act purely out of self-interest, weighing potential gains against the risk of getting caught. But that does not square with reality, where most people do not cheat—even when it might be profitable. To explain this, the authors adopt a moralized utility function [2] that incorporates intrinsic motivations like shame, personal ethics, and social norms.

Using responses from 2942 participants in the UK’s 2016 British Social Attitudes survey, the researchers found that people judge benefit fraud more harshly than tax evasion—even when the amount of money involved is the same. Why? The authors suggest that taking from the public purse feels more morally wrong than not paying into it.

Crucially, the study finds that moral and social factors—such as religiosity, political views, and personal values—significantly influence whether someone says they would engage in tax or benefit fraud. For example, more religious or authoritarian-leaning individuals were less likely to consider breaking the rules, while those with higher incomes or liberal attitudes were more inclined to do so.

The takeaway? Policies aimed at reducing fiscal crimes could benefit from moral messaging and social cues, not just financial deterrents. Socio-psychological characteristics (like shame and social norms), it turns out in a more holistic perspective, might also be a powerful ally in promoting honesty [3,4].

Reference

[1] Vuong QH. (2024). Wild Wise Weird. https://www.amazon.com/dp/B0BG2NNHY6/

[2] Barile L, et al. (2025). “Ain’t that a shame”: moral costs and fiscal crimes. Humanities and Social Sciences Communications, 12, 421. https://doi.org/10.1057/s41599-025-04711-4

[3] Levitt SD, List JA. (2007). What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World? Journal of Economic Perspectives, 21(2), 153-174. https://www.aeaweb.org/articles?id=10.1257/jep.21.2.153 

[4] Nguyen MH. (2024). How can satirical fables offer us a vision for sustainability? Visions for Sustainability. https://ojs.unito.it/index.php/visions/article/view/11267