IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Firm-oriented policies, tax cheating and perverse outcomes

  • Francesco Busato
  • Bruno Chiarini
  • Pasquale De Angelis
  • Elisabetta Marzano

This paper examines the implications of firm-oriented fiscal policies, namely investment subsidies and tax allowances, in an economy where producers may potentially avoid taxes. Among our results we stress the following. First, although investment subsidies induce increased capital accumulation (a level effect), they promote tax evasion; these subsidies induce firms to increase actual capital accumulation (a level effect), but also produce a reduction in the share of aggregate capital stock deployed in taxed, "official" production (a composition effect). Second, parameters characterizing the tax enforcement system play a major role in explaining tax evasion and firm size. Third, the technology structure matters for determining how to allocate resources between official and unofficial production.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://economia.uniparthenope.it/ise/sito/DP/DP_10_2008.pdf
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Antonietta Milano)


Download Restriction: no

Paper provided by D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy in its series Discussion Papers with number 10_2008.

as
in new window

Length:
Date of creation: 31 Aug 2008
Date of revision:
Handle: RePEc:prt:dpaper:10_2008
Contact details of provider: Postal: via Medina 40, 80133 I - Napoli
Phone: ++39-81-5512207
Fax: ++39-81-5511140
Web page: http://economia.uniparthenope.it/ise/sito/index.htm
Email:


More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Boeri, Tito & Garibaldi, Pietro, 2002. "Shadow Activity and Unemployment in a Depressed Labour Market," CEPR Discussion Papers 3433, C.E.P.R. Discussion Papers.
  2. Bayer, Ralph-C., 2006. "A contest with the taxman - the impact of tax rates on tax evasion and wastefully invested resources," European Economic Review, Elsevier, vol. 50(5), pages 1071-1104, July.
  3. Abel, Andrew B., 1982. "Dynamic effects of permanent and temporary tax policies in a q model of investment," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 353-373.
  4. 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.
  5. Bruno Chiarini & Elisabetta Marzano & Friedrich Schneider, . "Tax rates and Tax evasion: an Empirical Analysis of the Structural Aspects and Long-Run Characteristics in Italy," Working Papers wp2009-1, Department of the Treasury, Ministry of the Economy and of Finance.
  6. Lawrence H. Summers, 1981. "Taxation and Corporate Investment: A q-Theory Approach," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 12(1), pages 67-140.
  7. Joel Slemrod & Shlomo Yitzhaki, 2000. "Tax Avoidance, Evasion, and Administration," NBER Working Papers 7473, National Bureau of Economic Research, Inc.
  8. Busato, Francesco & Chiarini, Bruno & Rey, Guido M., 2012. "Equilibrium implications of fiscal policy with tax evasion: A long run perspective," International Review of Law and Economics, Elsevier, vol. 32(2), pages 197-214.
  9. repec:att:wimass:9610 is not listed on IDEAS
  10. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
  11. Bontempi Maria Elena & Giannini Silvia & Guerra Maria Cecilia & Tiraferri Angela, 2001. "Incentivi agli investimenti e tassazione dei profitti: l'impatto delle recenti riforme fiscali sul "cash flow" delle società di capitali," Politica economica - Journal of Economic Policy (PEJEP), Società editrice il Mulino, issue 3, pages 249-284.
  12. Alessandro Santoro, 2008. "Taxpayers’Choices Under Studi Di Settore:What Do We Know And How We Can Interpret It?," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 67(2), pages 161-184, July.
  13. Rainer Nitsche & Paul Heidhues, 2006. "Study on methods to analyse the impact of state aid on competition," European Economy - Economic Papers 244, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  14. Trandel, Greg & Snow, Arthur, 1999. "Progressive income taxation and the underground economy," Economics Letters, Elsevier, vol. 62(2), pages 217-222, February.
  15. Dan Anderberg & Alessandro Balestrino & Umberto Galmarini, 2003. "Search and Taxation in a Model of Underground Economic Activities," Economic Inquiry, Western Economic Association International, vol. 41(4), pages 647-659, October.
  16. Francesco Busato & Bruno Chiarini, 2004. "Market and underground activities in a two-sector dynamic equilibrium model," Economic Theory, Springer, vol. 23(4), pages 831-861, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:prt:dpaper:10_2008. 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: (Antonietta Milano)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.