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The excess burden of tax evasion – An experimental detection-concealment contest Author info | Abstract | Publisher info | Download info | Related research | Statistics Ralph-C Bayer
Matthias Sutter
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We present an experimental study on the wasted resources associated with tax evasion. This waste arises from taxpayers and tax authorities, investing costly effort in concealment, respectively detect ion, of tax evasion. We show that (socially inefficient) efforts depend positively on the prevailing tax rate, but not on the fine which is imposed in case of detected tax evasion. The frequency of evasion increases with tax rates. Additionally, we observe less tax evasion than a model with risk neutral taxpayers predicts. We find evidence that this is rather due to individual moral constraints than due to risk aversion.
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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number
2003-28.
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Length: 30 pages
Date of creation: Oct 2003Date of revision:
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Keywords: tax evasion ; contest ; experiment ; tax rates ; fines ; Other versions of this item:
Find related papers by JEL classification: H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Dzhumashev, Ratbek & Gahramanov, Emin, 2008.
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Ratbek Dzhumashev & Emin Gahramanov, 2008.
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[Downloadable!] Claude Montmarquette & Giorgio Coricelli & Mateus Joffily & Marie-Claire Villeval, 2007.
"Tax Evasion: Cheating Rationally or Deciding Emotionally? ,"
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"In the Service of the Society: Labour Management Practices in the Australian Life Insurance Industry to 1940 ,"
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Ratbek Dzhumashev & Emin Gahramanov, 2009.
"A Stochastic Growth Model with Income Tax Evasion: Implications for Australia ,"
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2009_05, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
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