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Income Tax Evasion Revisited: The Impact of Interest Rate Yields on Tax‐Free Municipal Bonds

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  • Richard J. Cebula

Abstract

This study empirically investigates a hypothesis that the degree of aggregate federal personal income tax evasion may be influenced by the interest rate yield on high‐grade municipal bonds. After allowing for the impacts of a variety of factors that typically have been inferred to influence income tax evasion, it is found that the higher the tax‐free interest rate yield on high‐grade municipal bonds relative to the taxable yield on 10‐year Treasury notes, the lower the aggregate degree of federal personal income tax evasion.

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  • Richard J. Cebula, 2004. "Income Tax Evasion Revisited: The Impact of Interest Rate Yields on Tax‐Free Municipal Bonds," Southern Economic Journal, John Wiley & Sons, vol. 71(2), pages 418-423, October.
    • Handle: RePEc:wly:soecon:v:71:y:2004:i:2:p:418-423
    DOI: 10.1002/j.2325-8012.2004.tb00647.x
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    References listed on IDEAS

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    1. Richard J. Cebula, 2001. "Impact of income-detection technology and other factors on aggregate income tax evasion:the case of the United States," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 54(219), pages 401-415.
    2. James Alm & Gary H. McClelland & William D. Schulze, 1999. "Changing the Social Norm of Tax Compliance by Voting," Kyklos, Wiley Blackwell, vol. 52(2), pages 141-171, May.
    3. Feige,Edgar L. (ed.), 1989. "The Underground Economies," Cambridge Books, Cambridge University Press, number 9780521262309.
    4. David J. Pyle, 1989. "The Consequences of Tax Evasion and the Black Economy," Palgrave Macmillan Books, in: Tax Evasion and the Black Economy, chapter 7, pages 130-152, Palgrave Macmillan.
    5. Alm, James & Jackson, Betty & McKee, Michael, 1992. "Institutional Uncertainty and Taxpayer Compliance," American Economic Review, American Economic Association, vol. 82(4), pages 1018-1026, September.
    6. David J. Pyle, 1989. "Tax Evasion and the Black Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-08488-3.
    7. Paolo M. Panteghini, 2000. "Tax Evasion and Entrepreneurial Flexibility," Public Finance Review, , vol. 28(3), pages 199-209, May.
    8. Frank Atkins, 1999. "Macroeconomic time series and the monetary aggregates approach to estimating the underground economy," Applied Economics Letters, Taylor & Francis Journals, vol. 6(9), pages 609-611.
    9. Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-373, August.
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    1. Richard J. Cebula, 2014. "The underground economy in the U.S.A.: preliminary new evidence on the impact of income tax rates (and other factors) on aggregate tax evasion 1975-2008," PSL Quarterly Review, Economia civile, vol. 67(271), pages 451-481.
    2. Richard J. Cebula, 2014. "Where Has The Currency Gone? And Why? The Underground Economy And Personal Income Tax Evasion In The U.S., 1970-2008," Review of Economic Analysis, Digital Initiatives at the University of Waterloo Library, vol. 6(1), pages 36-52, June.

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