Tax Evasion in Interrelated Taxes
In 1969, Shoup postulated that the presence of interrelated taxes in a tax system would reinforce the tax penalty system ("self-reinforcing penalty system of taxes"). In this paper, we have tried to formally develop this idea. We find that in order for tax reinforcement to be maintained, it is necessary for interrelated taxes to be administered by a single tax administration, or if they are administered by different tax administrations, the level of collaboration between them has to be sufficiently high. If so, tax evasion in interrelated taxes might be considered as an alternative explanation for the gap between the levels of tax evasion that can be guessed in practice and the much higher levels predicted by the classical tax evasion theory (Allingham and Sandmo, 1972; Yitzhaki, 1974). Otherwise, the result anticipated by Shoup may even be reversed. Moreover, as long as collaboration is imperfect, the classical results of the comparative statics might change, since in some cases, although global tax compliance increases when faced with a variation in a tax parameter, it can decrease in a single tax.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 93 403 46 46
Fax: 93 403 98 32
Web page: http://www.ieb.ub.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Border, Kim C & Sobel, Joel, 1987. "Samurai Accountant: A Theory of Auditing and Plunder," Review of Economic Studies, Wiley Blackwell, vol. 54(4), pages 525-40, October.
- Sanchez, Isabel & Sobel, Joel, 1993. "Hierarchical design and enforcement of income tax policies," Journal of Public Economics, Elsevier, vol. 50(3), pages 345-369, March.
- James Andreoni & Brian Erard & Jonathan Feinstein, 1998.
Journal of Economic Literature,
American Economic Association, vol. 36(2), pages 818-860, June.
- Bordignon, Massimo, 1993. "A fairness approach to income tax evasion," Journal of Public Economics, Elsevier, vol. 52(3), pages 345-362, October.
- Robin Boadway & Nicolas Marceau & Steeve Mongrain, 2002. "Joint tax evasion," Canadian Journal of Economics, Canadian Economics Association, vol. 35(3), pages 417-435, August.
- Alm, James & McClelland, Gary H. & Schulze, William D., 1992. "Why do people pay taxes?," Journal of Public Economics, Elsevier, vol. 48(1), pages 21-38, June.
- Frank A. Cowell, 1990. "Cheating the Government: The Economics of Evasion," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262532484, June.
- Eduardo Engel & James R. Hines Jr., 1998.
"Understanding Tax Evasion Dynamics,"
Documentos de Trabajo
47, Centro de Economía Aplicada, Universidad de Chile.
- Eduardo Engel & James Hines, 2000. "Understanding Tax Evasion Dynamics," Econometric Society World Congress 2000 Contributed Papers 1117, Econometric Society.
- Eduardo M.R.A. Engel & James R. Hines, Jr., 1999. "Understanding Tax Evasion Dynamics," NBER Working Papers 6903, National Bureau of Economic Research, Inc.
- Cremer, Helmuth & Gahvari, Firouz, 2000. "Tax evasion, fiscal competition and economic integration," European Economic Review, Elsevier, vol. 44(9), pages 1633-1657, October.
- Philippe Bacchetta & Maria Paz Espinosa, 1993.
"Information Sharing and Tax Competition Among Governments,"
CEPR Financial Markets Paper
0028, European Science Foundation Network in Financial Markets, c/o C.E.P.R, 77 Bastwick Street, London EC1V 3PZ..
- Bacchetta, Philippe & Espinosa, Maria Paz, 1995. "Information sharing and tax competition among governments," Journal of International Economics, Elsevier, vol. 39(1-2), pages 103-121, August.
- Bacchetta, P. & Paz Espinosa, M., 1992. "Information Sharing and Tax Competition Among Governments," UFAE and IAE Working Papers 173.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Fedeli, Silvia & Forte, Francesco, 1999. "Joint income-tax and VAT-chain evasion," European Journal of Political Economy, Elsevier, vol. 15(3), pages 391-415, September.
- Bernasconi, Michele, 1998. "Tax evasion and orders of risk aversion," Journal of Public Economics, Elsevier, vol. 67(1), pages 123-134, January.
- Borck, Rainald, 2004.
"Stricter enforcement may increase tax evasion,"
European Journal of Political Economy,
Elsevier, vol. 20(3), pages 725-737, September.
- 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.
- Pencavel, John H., 1979. "A note on income tax evasion, labor supply, and nonlinear tax schedules," Journal of Public Economics, Elsevier, vol. 12(1), pages 115-124, August.
- Niepelt, Dirk, 2003. "Tax Evasion Dynamics," Seminar Papers 721, Stockholm University, Institute for International Economic Studies.
- Karni, Edi & Schmeidler, David, 1991. "Utility theory with uncertainty," Handbook of Mathematical Economics, in: W. Hildenbrand & H. Sonnenschein (ed.), Handbook of Mathematical Economics, edition 1, volume 4, chapter 33, pages 1763-1831 Elsevier.
- Yitzhaki, Shlomo, 1974. "Income tax evasion: A theoretical analysis," Journal of Public Economics, Elsevier, vol. 3(2), pages 201-202, May.
- Ira N. Gang & Arindam Das-Gupta, 1998. "Value Added Tax Evasion, Auditing and Transactions Matching," Departmental Working Papers 199607, Rutgers University, Department of Economics.
- Reinganum, Jennifer F. & Wilde, Louis L., 1985. "Income tax compliance in a principal-agent framework," Journal of Public Economics, Elsevier, vol. 26(1), pages 1-18, February.
When requesting a correction, please mention this item's handle: RePEc:ieb:wpaper:382874art147. 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: ()
If references are entirely missing, you can add them using this form.