Tax Amnesties as Asset-Laundering Devices
AbstractThis article analyzes the effect of a one-time tax amnesty intended to induce private citizens to voluntarily declare black assets accumulated from past tax evasion. In a dynamic setting, we find that such an amnesty tends to enhance voluntary taxpayer compliance and reduce the size of the underground economy. However, it also generally tends to reduce aggregate net revenues collected by the government in the long run, provided black assets command a higher pretax rate of return than white assets. This is due to a post-amnesty reduction in involuntary revenue collections that outweighs direct amnesty receipts and the increase in voluntary compliance. The desirability of such amnesties thus depends on the importance of unearthing black assets per se, relative to increasing revenue collections. Copyright 1996 by Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Journal of Law, Economics and Organization.
Volume (Year): 12 (1996)
Issue (Month): 2 (October)
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Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
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Web page: http://jleo.oupjournals.org/
Other versions of this item:
- Arindam Das-Gupta & Dilip Mookherjee, 1995. "Tax Amnesties as Asset Laundering Devices," Boston University - Institute for Economic Development 69, Boston University, Institute for Economic Development.
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- Julio López Laborda & Fernando Rodrigo Sauco, 2002. "El análisis económico de las amnistías fiscales: ¿Qué hemos aprendido hasta ahora?," Hacienda Pública Española, IEF, vol. 163(4), pages 121-153, December.
- Motta, Alberto & Burlando, Alfredo, 2007.
"Self reporting reduces corruption in law enforcement,"
5332, University Library of Munich, Germany, revised 23 Jun 2007.
- Alfredo Burlando & Alberto Motta, 2007. "Self Reporting reduces corruption in law enforcement," "Marco Fanno" Working Papers 0063, Dipartimento di Scienze Economiche "Marco Fanno".
- Sandro Momigliano & Pietro Rizza, 2007. "Temporary measures in Italy: buying or losing time?," MNB Conference Volume, Magyar Nemzeti Bank (the central bank of Hungary), vol. 1(1), pages 61-71, December.
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