Tax avoidance - a natural experiment
AbstractThe objective of this paper is to empirically study if and to what extent people legally reduce their tax payments. There are few empirical studies of tax avoidance although avoidance may seriously affect the possibilities to raise tax revenue. I use a sample of Swedish siblings receiving inheritances in 2004. These children of deceased had the opportunity to avoid inheritance taxes by partly or fully ceding their inheritances to the grandchildren. My first main result is that almost two thirds of the children avoid taxes. The likelihood of avoiding taxes decreases with age. The more of the taxes a child potentially can avoid, the more she avoids. Second, only one out of four minimize their tax payments. The more of the taxes a child potentially can avoid, the more likely he is to minimize taxes. And third, siblings tend to make the same choices whether or not to avoid taxes and to minimize taxes.
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Bibliographic InfoPaper provided by Uppsala University, Department of Economics in its series Working Paper Series with number 2007:13.
Length: 21 pages
Date of creation: 20 Feb 2007
Date of revision:
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Postal: Department of Economics, Uppsala University, P. O. Box 513, SE-751 20 Uppsala, Sweden
Phone: + 46 18 471 25 00
Fax: + 46 18 471 14 78
Web page: http://www.nek.uu.se/
More information through EDIRC
tax avoidance; inheritances; cede to children;
Find related papers by JEL classification:
- D10 - Microeconomics - - Household Behavior - - - General
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-02-24 (All new papers)
- NEP-EEC-2007-02-24 (European Economics)
- NEP-PBE-2007-02-24 (Public Economics)
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.:
- Ohlsson, Henry, 2007. "The equal division puzzle – empirical evidence on intergenerational transfers in Sweden," Working Paper Series 2007:10, Uppsala University, Department of Economics.
- Sandmo, Agnar, 2005. "The Theory of Tax Evasion: A Retrospective View," National Tax Journal, National Tax Association, vol. 58(4), pages 643-63, December .
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"The legacy of the Swedish gift and inheritance tax, 1884–2004,"
European Review of Economic History,
Cambridge University Press, vol. 15(03), pages 539-569, December.
- Ohlsson, Henry, 2009. "The legacy of the Swedish gift and inheritance tax, 1884-2004," Working Paper Series, Center for Fiscal Studies 2009:13, Uppsala University, Department of Economics.
- Ohlsson, Henry, 2007. "The legacy of the Swedish gift and inheritance tax, 1884–2004," Working Paper Series 2007:23, Uppsala University, Department of Economics.
- Katarina Nordblom & Henry Ohlsson, 2011.
"Bequests, gifts, and education: links between intergenerational transfers,"
Springer, vol. 40(2), pages 343-358, April.
- Nordblom, Katarina & Ohlsson, Henry, 2002. "BEQUESTS, GIFTS, AND EDUCATION Swedish evidence on parents’ transfer behavior," Working Papers in Economics 69, University of Gothenburg, Department of Economics.
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