Adding Realism to Theories of Taxpayer Compliance

ABSTRACT Explaining why people pay taxes has not been a central focus in the many important contributions of Jim Cox. Even so, I argue here that his work has greatly affected the way that we think about taxpayer compliance, by adding both directly and indirectly much needed realism to the theories and the applications of compliance. These contributions revolve around his work on improving experimental design, on developing theories of decision making under risk, and, especially, on measuring and identifying social (or other‐regarding) preferences. I explain the basis for this conclusion by starting with an overview of the compliance literature and its evolution over time. I then examine the specific ways by which Jim's work has influenced our thinking, by focusing on several of his papers. I finish with some suggestions for future research directions, directions that illustrate the many ways that applying the lessons of Jim's insights can continue to have an impact on our thinking.