IDEAS home Printed from https://ideas.repec.org/a/oup/econjl/v129y2019i620p1894-1923..html

Distributional Implications of Joint Tax Evasion

Author

Listed:
  • Odd E Nygård
  • Joel Slemrod
  • Thor O Thoresen

Abstract

Both buyers and sellers of goods and services may benefit from letting their economic transactions go unrecorded for tax purposes. The supplier reduces his tax burden by underreporting income and sales, whereas the consumer may gain from buying a non-taxed lower-priced product. The distributional implications of such joint tax evasion depend on the amounts evaded, on where the evaders on both sides of the market are found in the income distribution, and on how the financial gain is split. Our empirical investigations show that the tax evasion-controlled estimate of income inequality in Norway exhibits more income dispersion than official estimates.

Suggested Citation

  • Odd E Nygård & Joel Slemrod & Thor O Thoresen, 2019. "Distributional Implications of Joint Tax Evasion," The Economic Journal, Royal Economic Society, vol. 129(620), pages 1894-1923.
    • Handle: RePEc:oup:econjl:v:129:y:2019:i:620:p:1894-1923.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/ecoj.12619
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Asatryan, Zareh & Gomtsyan, David, 2020. "The incidence of VAT evasion," ZEW Discussion Papers 20-027, ZEW - Leibniz Centre for European Economic Research.
    2. Marie Bjørneby & Annette Alstadsæter & Kjetil Telle, 2018. "Collusive tax evasion by employers and employees. Evidence from a randomized fi eld experiment in Norway," Discussion Papers 891, Statistics Norway, Research Department.
    3. Kristoffer Berg & Thor O. Thoresen, 2020. "Problematic response margins in the estimation of the elasticity of taxable income," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(3), pages 721-752, June.
    4. Jianjun Li & Xuan Wang, 2020. "Does VAT have higher tax compliance than a turnover tax? Evidence from China," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(2), pages 280-311, April.
    5. Mehmet Burak Turgut & Tomasz Tratkiewicz, 2023. "Estimate of the Underground Economy in Poland Based on Household Expenditures and Incomes," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 15(1), pages 1-29, March.
    6. Ana Cinta G Cabral & Christos Kotsogiannis & Gareth Myles, 2019. "Self-Employment Income Gap in Great Britain: How Much and Who?," CESifo Economic Studies, CESifo Group, vol. 65(1), pages 84-107.
    7. Per Engström & Johannes Hagen & Edvard Johansson, 2023. "Estimating tax noncompliance among the self-employed—evidence from pleasure boat registers," Small Business Economics, Springer, vol. 61(4), pages 1747-1771, December.
    8. Engström, Per & Hagen, Johannes, 2017. "Income underreporting among the self-employed: A permanent income approach," European Economic Review, Elsevier, vol. 92(C), pages 92-109.
    9. Gavoille, Nicolas & Zasova, Anna, 2023. "What we pay in the shadows: Labor tax evasion, minimum wage hike and employment," Journal of Public Economics, Elsevier, vol. 228(C).
    10. Hebous, Shafik & Jia, Zhiyang & Løyland, Knut & Thoresen, Thor O. & Øvrum, Arnstein, 2023. "Do Audits Improve Future Tax Compliance in the Absence of Penalties? Evidence from Random Audits in Norway," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 305-326.
    11. Bjørkheim, Julie Brun & Nygård, Odd E., 2024. "Gender Differences in Tax Evasion: Evidence from Norwegian Administrative Data," Discussion Papers 2024/8, Norwegian School of Economics, Department of Business and Management Science.
    12. Merike Kukk & Alari Paulus & Karsten Staehr, 2020. "Cheating in Europe: underreporting of self-employment income in comparative perspective," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(2), pages 363-390, April.
    13. Annette Alstadsæter & Niels Johannesen & Gabriel Zucman, 2019. "Tax Evasion and Inequality," American Economic Review, American Economic Association, vol. 109(6), pages 2073-2103, June.
    14. Odd E. Nygård & Thor O. Thoresen, 2025. "Controlling for fixed effects in studies of income underreporting," European Journal of Law and Economics, Springer, vol. 59(2), pages 307-328, April.
    15. Brusco, Giacomo & Velayudhan, Tejaswi, 2025. "VAT incidence in real VAT systems," Journal of Public Economics, Elsevier, vol. 249(C).

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:econjl:v:129:y:2019:i:620:p:1894-1923.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/resssea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.