Is Individual Tax Compliance a Matter of Meritocracy? The Role of Perceived Social Mobility on Tax Morale

ABSTRACT This study investigates the relationship between perceived social mobility (PSM), proxied by the belief that success depends on personal effort rather than luck, and tax morale, defined as individuals' intrinsic willingness to pay taxes. While prior research widely analyzes the determinants of tax compliance, the role of subjective perceptions of mobility remains underexplored. Employing data from the seventh wave of the World Values Survey, which covers citizens belonging to 63 countries, this paper provides empirical evidence about the relationship between PSM and individual tax preferences. Individuals who perceive society as meritocratic tend to express greater willingness to comply with fiscal duties, while subjects who attribute personal success to luck show lower tax morale. The relationship is strongest among upwardly mobile respondents and weakest among those who experienced downward mobility. These results are robust across multiple econometric strategies, including instrumental variables estimation. Beyond this baseline relationship, which has been confirmed across different world's macro‐regions, the analysis of interactions shows that the positive impact of PSM on tax morale is complemented by social trust while, conversely, PSM acts as a partial substitute for redistributive preferences. In fact, while support for redistribution is generally associated with higher tax morale, its marginal effect weakens as individuals increasingly perceive the social system as meritocratic. This evidence highlights how individual fiscal preferences can be based on citizens' perception of the society as meritocratic and that not only the actual but also the perceived social mobility may strengthen tax morale and encourage greater voluntary compliance.