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Tax compliance under tax regime changes

  • Friedrich Heinemann


  • Martin Kocher


We focus on the compliance effects of tax regime changes. According to the economic model of tax evasion, a tax reform should affect compliance through its impact on tax rates and incentives. Our findings demonstrate the importance of at least two further effects not covered by the traditional model: First, ceteris paribus reform losers tend to evade more taxes after the reform. Second, a reform from a proportionate to a progressive system decreases compliance compared to a switch in the reverse direction. However, the level of compliance is generally higher under the progressive than under the proportionate regime. Copyright Springer Science+Business Media, LLC 2013

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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 20 (2013)
Issue (Month): 2 (April)
Pages: 225-246

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Handle: RePEc:kap:itaxpf:v:20:y:2013:i:2:p:225-246
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