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The Learning Path of the Hidden Economy: The Tax Burden and Tax Evasion in New Zealand Author info | Abstract | Publisher info | Download info | Related research | Statistics David E. A. Giles, () (Department of Economics, University of Victoria )
Patrick J. Caragata () (McCallum Petterson Diagnostics, Wellington,N.Z.)
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This paper considers the "learning curve" relationship between the aggregate tax rate and the relative size of the hidden economy in New Zealand. Some simple non-linear models are estimated so that the effects of changes in the effective tax rate on the underground economy can be simulated. We find that about half of the hidden activity in New Zealand is a learned response to changing opportunities and constraints in fiscal policy, but this amount varies over the business cycle. Simulating a zero tax rate permits us to discover the "natural rate" of underground and criminal activity. Some partial lessons are drawn for taxation policy in that country.
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Paper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number
9904.
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Length: 26 pages
Date of creation: 31 May 1999Date of revision:
Handle: RePEc:vic:vicewp:9904Note: ISSN 1485-6441. This is a revised version of N.Z. Inland Revenue Department Working Paper No. 21, December 1996, and also of UVic EWP9805.Contact details of provider: Postal: PO Box 1700, STN CSC, Victoria, BC, Canada, V8W 2Y2 Phone: (250)721-6197 Fax: (250)721-6214 Web page: http://web.uvic.ca/econ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Lori Cretney).
Keywords: Hidden Economy ; Underground Economy ; Tax Evasion ; Tax Gap ; Other versions of this item:
Find related papers by JEL classification: C5 - Mathematical and Quantitative Methods - - Econometric Modeling H1 - Public Economics - - Structure and Scope of Government H2 - Public Economics - - Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports :
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Full
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.)
David E. A. Giles & Gugsa T. Werkneh & Betty J. Johnson, 1999.
"Asymmetric Responses of the Underground Economy to Tax Changes: Evidence From New Zealand Data ,"
Econometrics Working Papers
9911, Department of Economics, University of Victoria.
[Downloadable!]
Other versions: David E. A. Giles & Betty J. Johnson, 1999.
"Taxes, Risk-Aversion, and the Size of the Underground Economy: A Nonparametric Analysis With New Zealand Data ,"
Econometrics Working Papers
9910, Department of Economics, University of Victoria.
[Downloadable!]
Other versions: Amihai Glazer, 2008.
"Reducing Current Taxes to Raise Future Revenue ,"
Working Papers
080914, University of California-Irvine, Department of Economics.
[Downloadable!]
Lipatov, Vilen, 2003.
"Evolution of Tax Evasion ,"
MPRA Paper
966, University Library of Munich, Germany, revised 06 Dec 2005.
[Downloadable!]
Lipatov, Vilen, 2008.
"Social Interaction in Tax Evasion ,"
MPRA Paper
8829, University Library of Munich, Germany.
[Downloadable!]
Robert Draeseke & David E. A. Giles, 1999.
"A Fuzzy Logic Approach to Modelling the Underground Economy ,"
Econometrics Working Papers
9909, Department of Economics, University of Victoria.
[Downloadable!]
Ratbek Dzhumashev & Emin Gahramanov, 2009.
"A Stochastic Growth Model with Income Tax Evasion: Implications for Australia ,"
Economics Series
2009_05, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.
[Downloadable!]
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