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Cyclical Tax Enforcement

Author

Listed:
  • José M Durán‐Cabré
  • Alejandro Esteller‐Moré
  • Luca Salvadori

Abstract

We wonder whether tax enforcement varies along the economic cycle and aim at answering that question from a positive perspective by means of survey data for the Spanish case (1994–2015). According to a fiscal capacity argument, tax enforcement might be stronger in times of crisis (counter‐cyclical), but if the tax administration prioritizes taxpayers' welfare over public revenue, enforcement might be slacker (procyclical). We find tax enforcement is not immune to the state of the economy. In particular, it presents a prevailing counter‐cyclical trend, but in presence of a severe economic crisis it turns out to be procyclical. (JEL D78, H12, H26, H83)

Suggested Citation

  • José M Durán‐Cabré & Alejandro Esteller‐Moré & Luca Salvadori, 2020. "Cyclical Tax Enforcement," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1874-1893, October.
    • Handle: RePEc:bla:ecinqu:v:58:y:2020:i:4:p:1874-1893
    DOI: 10.1111/ecin.12902
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    More about this item

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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