1 CHAPTER 1: INTRODUCTION 1.0 Chapter ... - DSpace@UM

Distribution in tax fairness refers to what individuals deserve and what they receive.Empirical research was mostly focused on the perceived justice and fairness. Finding thetaxpayers’ identity will give answers to the relevance of fairness direction. In manysurveys conducted in US it indicated that Americans believe that the tax system is unfairand wanted a tax reform. Taxation involves various types of distributive justice whereasmost studies only select very few and give them overall ratings. Basically there are threerules that affect a person’s deserved outcome: contributions rules, needs rule and equalityrule. To note, Spice & Becker (1968) and Porcano (1984) employed inequity whichincreased tax evasion and advantageous inequity reduced tax evasion. A tax system is aredistribution system, therefore, distributive framework is the best to analyze tax policyand measure the ‘fairness’ of the system. Porcano(1984) argued justice is amutltidimensional concept thus, it is appropriate to use distributive theory which usesseveral justice rules in determining one’ deservingness; Another thing is, that it is nolonger one’s personal or group treatment but the distribution of tax burdens across as awhole e.g., the fairness of progressive tax rate. Next, how procedural justice andlegitimacy are relevant towards tax fairness will be discussed.2.2.2 Procedural Justice And LegitimacyGalligan (2005) mentioned the pivotal role of legitimacy on tax compliance behaviour.Procedural justice will lead to legitimacy. Legitimacy in tax compliance behaviour isdefined as a belief/ trust by taxpayer on the tax authority. This belief that they are fairlytreated will want to obey the laws. Tyler (2004) has analyzed the cooperation the public24