Does political intention affect tax evasion?
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.
References listed on IDEAS
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.:
- William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
- Andreoni, J. & Erard, B. & Feinstein, J., 1996.
9610r, Wisconsin Madison - Social Systems.
- Hettich,Walter & Winer,Stanley L., 1999.
"Democratic Choice and Taxation,"
Cambridge University Press, number 9780521622912, june. pag.
- Ralph-C Bayer, 2003.
"A Contest with the Taxman: The Impact of Tax Rates on Tax Evasion and Wastefully Invested Resources,"
School of Economics Working Papers
2003-06, University of Adelaide, School of Economics.
- Bayer, Ralph-C., 2006. "A contest with the taxman - the impact of tax rates on tax evasion and wastefully invested resources," European Economic Review, Elsevier, vol. 50(5), pages 1071-1104, July.
- Ralph-C Bayer, 2004. "A Contest with the Taxman - The Impact of Tax Rates on Tax Evasion and Wastefully Invested Resources," School of Economics Working Papers 2004-11, University of Adelaide, School of Economics.
- Ralph C Bayer, 2004. "A contest with the taxman - The impact of tax rates on tax evasion and wastefully invested resources," Public Economics 0412010, EconWPA.
- Sandmo, Agnar, 1981. "Income tax evasion, labour supply, and the equity--efficiency tradeoff," Journal of Public Economics, Elsevier, vol. 16(3), pages 265-288, December.
- Mark B. Cronshaw & James Alm, 1995.
"Tax Compliance With Two-Sided Uncertainty,"
Public Finance Review,
, vol. 23(2), pages 139-166, April.
- 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.
- Cowell, F A, 1981. "Taxation and Labour Supply with Risky Activities," Economica, London School of Economics and Political Science, vol. 48(192), pages 365-79, November.
- Cremer, H. & Marchand, M. & Pestieau, P., 1988.
"Evading, auditing and taxing: the equity-compliance tradeoff,"
CORE Discussion Papers
1988027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Cremer, H. & Marchand, M. & Pestieau, P., 1990. "Evading, auditing and taxing : The equity-compliance tradeoff," Journal of Public Economics, Elsevier, vol. 43(1), pages 67-92, October.
- Cremer, H. & Marchand, M. & Pestieau, P., 1988. "Evading, Auditing And Taxing: The Equity-Compliance Tradeoff," Papers 401, Cornell - Department of Economics.
- MacRae, C Duncan, 1977. "A Political Model of the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 239-63, April.
- Dilip Mookherjee & Ivan Png, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, Oxford University Press, vol. 104(2), pages 399-415.
- Clotfelter, Charles T, 1983. "Tax Evasion and Tax Rates: An Analysis of Individual Returns," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 363-73, August.
- Hettich, Walter & Winer, Stanley L, 1988. "Economic and Political Foundations of Tax Structure," American Economic Review, American Economic Association, vol. 78(4), pages 701-12, September.
- 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.
- 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.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- 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.
When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:30:y:2008:i:3:p:401-415. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.