Local Interaction in Tax Evasion
We study a model of tax evasion, where a flat-rate tax only finances the provision of public goods. Deciding on reported income, each individual takes into account that the less he reports, the higher is his private consumption but the lower is his moral satisfaction. The latter depends on his own current report and average previous reports of his neighbors. Under quite general assumptions, the steady state reported income is symmetric and the process converges to the steady state.
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- Frey, Bruno S. & Torgler, Benno, 2007.
"Tax morale and conditional cooperation,"
Journal of Comparative Economics,
Elsevier, vol. 35(1), pages 136-159, March.
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- Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," CREMA Working Paper Series 2006-11, Center for Research in Economics, Management and the Arts (CREMA).
- Zsombor Z. Meder & Andras Simonovits & Janos Vincze, 2012.
"Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality,"
IEHAS Discussion Papers
1203, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Zsombor Z. Méder & András Simonovits & János Vincze, 2012. "Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality," Working Papers 1202, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
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- Andras Simonovits, 2010. "Tax Morality and Progressive Wage Tax," IEHAS Discussion Papers 1005, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
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