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Workers' Tax Evasion in Italy

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Author Info

  • Carlo V Fiorio

    ()
    (University of Milan and Econpubblica, Bocconi University)

  • Francesco D'Amuri

    ()
    (University of Pavia, Econpubblica, Bocconi University)

Abstract

We apply a direct method to estimate tax evasion in Italy, assuming that tax evaders might consider declaring a closer-to-true income in an anonymous interview. The methodology is applied to employed and self-employed taxpayers, combining the Survey of Household Income and Wealth (SHIW) by the Bank of Italy and a large random sample of tax forms by SeCIT (Tax auditing office - Ministry of Finance), both referred to incomes received in 2000. Paying particular attention to the post-stratification of the data, we find that tax evasion is consistently higher for self-employment income than for employment income: the difference ranges from about 7% in lower deciles to 27% around the mode. This analysis shows that a relevant level of tax evasion arises also at low levels of employment income, although some under-sampling and misreporting problems need to be considered. An evaluation of the redistribution and incidence effects of tax evasion among workers is provided.

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Bibliographic Info

Article provided by GDE (Giornale degli Economisti e Annali di Economia), Bocconi University in its journal Giornale degli Economisti e Annali di Economia.

Volume (Year): 64 (2005)
Issue (Month): 2-3 (November)
Pages: 247-270

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Handle: RePEc:gde:journl:gde_v64_n2-3_p247-270

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Related research

Keywords: tax evasion; post-stratification; microsimulation; redistribution;

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References

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  1. Massimo Bordignon & Alberto Zanardi, 1997. "Tax Evasion in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 56(3-4), pages 169-210, December.
  2. Cowell, Frank A, 1985. "The Economic Analysis of Tax Evasion," Bulletin of Economic Research, Wiley Blackwell, vol. 37(3), pages 163-93, September.
  3. Brandolini, A., 1999. "The Distribution of Personal Income in Post-War Italy: Source Description, Date Quality, and the Time Pattern of Income Inequality," Papers 350, Banca Italia - Servizio di Studi.
  4. Friedrich Schneider, 2000. "The Increase of the Size of the Shadow Economy of 18 OECD Countries: Some Preliminary Explanations," CESifo Working Paper Series 306, CESifo Group Munich.
  5. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
  6. Giovanni D'Alessio & Ivan Faiella, 2002. "Non-response behaviour in the Bank of ItalyÂ’s Survey of Household Income and Wealth," Temi di discussione (Economic working papers) 462, Bank of Italy, Economic Research and International Relations Area.
  7. Roberta Zizza, 2002. "Metodologie di stima dellÂ’economia sommersa: unÂ’applicazione al caso italiano," Temi di discussione (Economic working papers) 463, Bank of Italy, Economic Research and International Relations Area.
  8. Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 47(3), pages 521-31, April.
  9. Kakwani, Nanok C, 1977. "Measurement of Tax Progressivity: An International Comparison," Economic Journal, Royal Economic Society, vol. 87(345), pages 71-80, March.
  10. Pissarides, Christopher A. & Weber, Guglielmo, 1989. "An expenditure-based estimate of Britain's black economy," Journal of Public Economics, Elsevier, vol. 39(1), pages 17-32, June.
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Citations

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Cited by:
  1. Christian Traxler, 2009. "Voting over taxes: the case of tax evasion," Public Choice, Springer, vol. 140(1), pages 43-58, July.
  2. Domenico Depalo & Raffaela Giordano, 2011. "The public-private pay gap: a robust quantile approach," Temi di discussione (Economic working papers) 824, Bank of Italy, Economic Research and International Relations Area.
  3. Mirco Tonin, 2009. "Minimumwage and tax evasion: theory and evidence," MNB Working Papers 2009/2, Magyar Nemzeti Bank (the central bank of Hungary).
  4. Manos Matsaganis & Maria Flevotomou, 2010. "Distributional Implications of Tax Evasion in Greece," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 31, Hellenic Observatory, LSE.
  5. Ceriani, Lidia & Fiorio, Carlo V. & Gigliarano, Chiara, 2013. "The importance of choosing the data set for tax-benefit analysis," EUROMOD Working Papers EM5/13, EUROMOD at the Institute for Social and Economic Research.
  6. Wenbiao Cai & Manish Pandey, 2013. "The Agricultural Productivity Gap in Europe," Departmental Working Papers 2013-05, The University of Winnipeg, Department of Economics.
  7. Leventi, Chrysa & Matsaganis, Manos & Flevotomou, Maria, 2013. "Distributional Implications of Tax Evasion and the Crisis in Greece," EUROMOD Working Papers em17/13, EUROMOD at the Institute for Social and Economic Research.
  8. Claudio De Vincenti & Ruggero Paladini & Corrado Pollastri, 2005. "For a Welfare-Oriented Taxation Reform in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(2-3), pages 189-213, November.
  9. Manos Matsaganis & Maria Flevotomou, 2010. "Distributional implications of tax evasion in Greece," LSE Research Online Documents on Economics 26074, London School of Economics and Political Science, LSE Library.
  10. Matsaganis, Manos & Benedek, Dóra & Flevotomou, Maria & Lelkes, Orsolya & Mantovani, Daniela & Nienadowska, Sylwia, 2010. "Distributional implications of income tax evasion in Greece, Hungary and Italy," MPRA Paper 21465, University Library of Munich, Germany.

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