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Does political intention affect tax evasion?

  • Kim, Sangheon
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    For quite sometime, tax evasion has attracted many researchers' attention in the field of public finance. Not enough attention, however, has been paid to the effects of political factors on tax evasion. This paper intends to provide an economic model of tax evasion, considering the interactions between tax authority and its sovereign government. It shows that tax evasion is influenced by the government's intention to control the economy, controlling for other determinants of tax evasion. The theoretical predictions are examined with annual data from the competitiveness reports published by the IMD and the WEF. The empirical evidence supports the theoretical model to a large extent.

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    File URL: http://www.sciencedirect.com/science/article/B6V82-4RHFVBG-1/1/6055107966de102a5a6518ac4e4f40ab
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    Article provided by Elsevier in its journal Journal of Policy Modeling.

    Volume (Year): 30 (2008)
    Issue (Month): 3 ()
    Pages: 401-415

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    Handle: RePEc:eee:jpolmo:v:30:y:2008:i:3:p:401-415
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505735

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    1. Mark B. Cronshaw & James Alm, 1995. "Tax Compliance With Two-Sided Uncertainty," Public Finance Review, , vol. 23(2), pages 139-166, April.
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    7. Pencavel, John H., 1979. "A note on income tax evasion, labor supply, and nonlinear tax schedules," Journal of Public Economics, Elsevier, vol. 12(1), pages 115-124, August.
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    14. Elffers, Henk & Weigel, Russell H. & Hessing, Dick J., 1987. "The consequences of different strategies for measuring tax evasion behavior," Journal of Economic Psychology, Elsevier, vol. 8(3), pages 311-337, September.
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    16. Friedman, Eric & Johnson, Simon & Kaufmann, Daniel & Zoido-Lobaton, Pablo, 2000. "Dodging the grabbing hand: the determinants of unofficial activity in 69 countries," Journal of Public Economics, Elsevier, vol. 76(3), pages 459-493, June.
    17. Era Dabla-Norris & Andrew Feltenstein, 2005. "The underground economy and its macroeconomic consequences," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(2), pages 153-174.
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