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The occurrence of tax amnesties: Theory and evidence

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  • Bayer, Ralph-C.
  • Oberhofer, Harald
  • Winner, Hannes

Abstract

This paper presents a theoretical model and empirical evidence to explain the occurrence of tax amnesties. We treat amnesties as endogenous, resulting from a strategic game between many taxpayers discounting future payments from punishment and a government that balances costs and benefits of amnesty programs. From the model we derive hypotheses about the factors that should influence the occurrence of tax amnesties. To test these predictions empirically, we rely on amnesty information from US States between 1981 and 2011. In line with the theoretical model, our empirical findings suggest that the likelihood of amnesties is mainly driven by a government's fiscal requirements and the taxpayers' expectations on future amnesties.

Suggested Citation

  • Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.
  • Handle: RePEc:eee:pubeco:v:125:y:2015:i:c:p:70-82
    DOI: 10.1016/j.jpubeco.2015.02.006
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    Cited by:

    1. repec:eee:pubeco:v:151:y:2017:i:c:p:110-125 is not listed on IDEAS
    2. Langenmayr, Dominika, 2017. "Voluntary disclosure of evaded taxes — Increasing revenue, or increasing incentives to evade?," Journal of Public Economics, Elsevier, vol. 151(C), pages 110-125.
    3. Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.
    4. Marcel Garz & Verena Pagels, 2017. "Cautionary Tales: Celebrities, the News Media, and Participation in Tax Amnesties," CESifo Working Paper Series 6795, CESifo Group Munich.
    5. Patrice Ollivaud, 2017. "Improving the allocation and efficiency of public spending in Indonesia," OECD Economics Department Working Papers 1381, OECD Publishing.
    6. Heiner Schmittdiel, 2015. "Voluntary Disclosure Programs for Tax Evaders," Tinbergen Institute Discussion Papers 15-128/VII, Tinbergen Institute.
    7. Koch, Christian & Müller, Cornelius, 2015. "Anticipated Tax Amnesties and Tax Compliance: An Experimental Study," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112991, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    Tax amnesties; Tax evasion;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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