IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v39y2011i5p682-711.html
   My bibliography  Save this article

The Effects of Tax Evasion on the Choice between Personal and Corporate Income Taxation

Author

Listed:
  • Diego d’Andria

Abstract

This article analyzes the relative choice between different tax tools burdening corporate incomes or dividends at the personal level in open economies where tax evasion, both corporate and personal, is not null. A theoretical discussion explains why a government may decide to levy a positive corporate income tax even when capital is internationally mobile while shareholders are immobile. Since tax auditing may be more effective on corporate incomes rather than on personal incomes, a benevolent or malevolent government may face a trade-off between reducing available capital supply and reducing total taxation revenues. The intuition is then submitted to empirical test using panel data from twenty-eight Organisation for Economic Co-operation and Development (OECD) countries. The results hint at a possible role for tax evasion in explaining why some countries prefer to tax corporate incomes rather than dividends and capital gains under personal taxation.

Suggested Citation

  • Diego d’Andria, 2011. "The Effects of Tax Evasion on the Choice between Personal and Corporate Income Taxation," Public Finance Review, , vol. 39(5), pages 682-711, September.
  • Handle: RePEc:sae:pubfin:v:39:y:2011:i:5:p:682-711
    as

    Download full text from publisher

    File URL: http://pfr.sagepub.com/content/39/5/682.abstract
    Download Restriction: no

    More about this item

    Keywords

    corporate income taxation; tax evasion;

    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:sae:pubfin:v:39:y:2011:i:5:p:682-711. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.