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Measuring, Explaining, and Controlling Tax Evasion: Lessons from Theory, Experiments, and Field Studies

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  • James Alm

    ()
    (Department of Economics, Tulane University)

Abstract

In this paper, I assess what we have learned about tax evasion since Michael Allingham and Agnar Sandmo launched the modern analysis of tax evasion in 1972. I focus on three specific questions and the answers to these questions that have emerged over the years. First, how do we measure the extent of evasion? Second, how can we explain these patterns of behavior? Third, how can we use these insights to control evasion? In the process, I illustrate my own answers to these questions by highlighting various specific examples of research. My main conclusion is that we have learned many things but that we also still have many gaps in our understanding of how to measure, explain, and control tax evasion. I also give some suggestions – and some predictions – about where promising avenues of future research may lie.

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File URL: http://econ.tulane.edu/RePEc/pdf/tul1213.pdf
File Function: First Version, 2012
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Bibliographic Info

Paper provided by Tulane University, Department of Economics in its series Working Papers with number 1213.

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Length: 34 pages
Date of creation: Jul 2012
Date of revision:
Handle: RePEc:tul:wpaper:1213

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Keywords: tax evasion; behavioral economics; experimental economics;

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References

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  7. Sanjit Dhami & Ali al-Nowaihi, 2005. "Why Do People Pay Taxes? Prospect Theory Versus Expected Utility Theory," Discussion Papers in Economics 05/23, Department of Economics, University of Leicester, revised Aug 2006.
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  24. Arthur Snow & Ronald S. Warren, 2005. "Ambiguity about Audit Probability, Tax Compliance, and Taxpayer Welfare," Economic Inquiry, Western Economic Association International, vol. 43(4), pages 865-871, October.
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  33. Andreoni, J. & Erard, B. & Feinstein, J., 1996. "Tax Compliance," Working papers 9610r, Wisconsin Madison - Social Systems.
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  35. Myles, Gareth D. & Naylor, Robin A., 1996. "A model of tax evasion with group conformity and social customs," European Journal of Political Economy, Elsevier, vol. 12(1), pages 49-66, April.
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  37. Jeffrey A. Dubin, 2007. "Criminal Investigation Enforcement Activities and Taxpayer Noncompliance," Public Finance Review, , vol. 35(4), pages 500-529, July.
  38. Alm, James & Bahl, Roy & Murray, Matthew N, 1990. "Tax Structure and Tax Compliance," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 603-13, November.
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