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Who Benefits from Tax Evasion?

Author

Listed:
  • James Alm

    (Department of Economics, Tulane University)

  • Keith Finlay

    (Department of Economics, Tulane University)

Abstract

In this paper, we examine the distributional effects of tax evasion, using results from theoretical, experimental, empirical, and especially the general equilibrium literatures on tax evasion. Much, if not all, of this evidence concludes that the main beneficiaries of successful tax evasion are the tax evaders themselves, with distributional effects that largely favor higher income individuals. However, when general equilibrium adjustments in commodity and factor prices are considered, the distributional effects become considerably more complicated. The work on tax compliance is also put in the broader context of the distributional effects of other types of criminal activities, where similar forces seem to be at work. We conclude with some suggestions for future research.

Suggested Citation

  • James Alm & Keith Finlay, 2012. "Who Benefits from Tax Evasion?," Working Papers 1214, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:1214
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    tax evasion; general equilibrium;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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