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Distributional implications of income tax evasion in Greece, Hungary and Italy

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Author Info

  • Matsaganis, Manos
  • Benedek, Dóra
  • Flevotomou, Maria
  • Lelkes, Orsolya
  • Mantovani, Daniela
  • Nienadowska, Sylwia

Abstract

Even though tax evasion has been the focus of a growing volume of research in recent years, the issue of its distributional impact is still relatively neglected. This paper is an attempt to analyse empirically the implications of tax evasion in terms of inequality, poverty, redistribution and progressivity of the income tax system in Greece, Hungary and Italy (three countries featuring an extensive informal economy). The paper applies the discrepancy method, i.e. compares two sets of data, household budget surveys and income tax returns, to derive ratios of under-reporting by income source and geographical area. The tax-benefit model EUROMOD is used to estimate the distributional impact of tax evasion comparing household disposable incomes to a full compliance counterfactual.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21465.

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Date of creation: 01 Feb 2010
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Handle: RePEc:pra:mprapa:21465

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Keywords: tax evasion; inequality; microsimulation;

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References

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Cited by:
  1. Giancarlo Corsetti & Michael P. Devereux & John Hassler & Gilles Saint-Paul & Hans-Werner Sinn & Jan-Egbert Sturm & Xavier Vives, 2011. "Chapter 3: Greece," EEAG Report on the European Economy, CESifo Group Munich, vol. 0, pages 97-125, 02.
  2. European Commission, 2013. "Tax reforms in EU Member States - Tax policy challenges for economic growth and fiscal sustainability – 2013 Report," Taxation Papers 38, Directorate General Taxation and Customs Union, European Commission.

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