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The intergenerational causal effect of tax evasion: Evidence from the commuter tax allowance in Austria

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  • Wolfgang Frimmel
  • Martin Halla
  • Jörg Paetzold

Abstract

Does tax evasion run in the family? To answer this question, we study the case of the commuter tax allowance in Austria. This allowance is designed as a step function of the distance between the residence and the workplace, creating sharp discontinuities at each bracket threshold. The distance to these brackets is a strong determinant of compliance since it corresponds to the probability of detection. The match of different administrative data sources allows us to observe actual compliance behavior at the individual level across two generations. To identify the intergenerational causal effect in tax evasion behavior, we use the paternal distance-to-bracket as an instrumental variable for paternal compliance. We find that paternal non-compliance increases children's non-compliance by about 20 percent.

Suggested Citation

  • Wolfgang Frimmel & Martin Halla & Jörg Paetzold, 2017. "The intergenerational causal effect of tax evasion: Evidence from the commuter tax allowance in Austria," Working Papers 2017-01, Faculty of Economics and Statistics, University of Innsbruck.
  • Handle: RePEc:inn:wpaper:2017-01
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    Cited by:

    1. Annette Alstadsæter & Wojciech Kopczuk & Kjetil Telle, 2019. "Social networks and tax avoidance: evidence from a well-defined Norwegian tax shelter," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(6), pages 1291-1328, December.
    2. Joerg Paetzold, 2019. "How do taxpayers respond to a large kink? Evidence on earnings and deduction behavior from Austria," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(1), pages 167-197, February.
    3. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2017. "Intergenerational Disadvantage: Learning about Equal Opportunity from Social Assistance Receipt," IZA Discussion Papers 11070, Institute of Labor Economics (IZA).
    4. Bastani, Spencer & Giebe, Thomas & Miao, Chizheng, 2020. "Ethnicity and tax filing behavior," Journal of Urban Economics, Elsevier, vol. 116(C).
    5. Ina Blind & Matz Dahlberg & Gustav Engström & John Östh, 2018. "Construction of Register-based Commuting Measures," CESifo Economic Studies, CESifo, vol. 64(2), pages 292-326.
    6. Paetzold, Jörg, 2019. "Do commuting subsidies increase commuting distances? Evidence from a Regression Kink Design," Regional Science and Urban Economics, Elsevier, vol. 75(C), pages 136-147.
    7. Di Gioacchino, Debora & Fichera, Domenico, 2020. "Tax evasion and tax morale: A social network analysis," European Journal of Political Economy, Elsevier, vol. 65(C).
    8. Essi Eerola & Tuomas Kosonen & Kaisa Kotakorpi & Teemu Lyytikäinen, 2019. "Tax Compliance in the RentalHousing Market: Evidence from aField Experiment," Discussion Papers 126, Aboa Centre for Economics.
    9. Riedel, Nadine & Strohmaier, Kristina & Lediga, Collen, 2019. "Spatial Tax Enforcement Spillovers: Evidence from South Africa," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203500, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    tax evasion; tax morale; intergenerational correlation; intergenerational causal effect;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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