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Identifying Tax Compliance from Changes in Enforcement: Theory and Empirics

Author

Listed:
  • Andrew Bibler
  • Laura Grigolon
  • Keith F. Teltser
  • Mark J. Tremblay

Abstract

Governments increasingly use changes in tax rules to combat evasion. We develop a general approach to point-identify tax compliance along with supply and demand elasticities; identification requires data on prices and quantities before and after changes in tax enforcement and a demand or supply shifter. We illustrate our approach using data on Airbnb collection agreements, where full enforcement is achieved by shifting the tax burden away from hosts to renters via the platform. We find that taxes are paid on roughly zero to 3.5 percent of Airbnb transactions prior to enforcement.

Suggested Citation

  • Andrew Bibler & Laura Grigolon & Keith F. Teltser & Mark J. Tremblay, 2024. "Identifying Tax Compliance from Changes in Enforcement: Theory and Empirics," CESifo Working Paper Series 10921, CESifo.
    • Handle: RePEc:ces:ceswps:_10921
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    References listed on IDEAS

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    1. Miguel Almunia & David Lopez-Rodriguez, 2018. "Under the Radar: The Effects of Monitoring Firms on Tax Compliance," American Economic Journal: Economic Policy, American Economic Association, vol. 10(1), pages 1-38, February.
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    More about this item

    Keywords

    tax evasion; compliance; statutory incidence; tax invariance; Airbnb; sharing economy; voluntary collection agreements;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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