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Tax Amnesties

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  • Marchese, Carla

Abstract

A tax amnesty can be a useful tax policy tool when exploited in exceptional circumstances. Amnesties can also be used systematically as a discriminatory mechanism to improve the efficiency or even the equity of the tax system, but only if government commitment to enforcing tax law is credible. If such credibility is lacking, amnesties may actually undermine future tax revenue by breaching the implicit, psychological contract between taxpayers and the state, thus reducing taxpayers’ internal motivation for compliance. Amnesties also have important political implications, because they can signal intertemporal inconsistency in government decision-making and may be linked to the political business cycle. Amnesties respond to externalities among states or layers of government deriving from tax and enforcement policies, and network effects in these fields can trigger waves of amnesties.

Suggested Citation

  • Marchese, Carla, 2014. "Tax Amnesties," IEL Working Papers 17, Institute of Public Policy and Public Choice - POLIS.
  • Handle: RePEc:uca:ucaiel:17
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    References listed on IDEAS

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    1. Benno Torgler & Christoph A. Schaltegger, 2005. "Tax Amnesties and Political Participation," Public Finance Review, , vol. 33(3), pages 403-431, May.
    2. Mikesell, John L. & Ross, Justin M., 2012. "Fast Money? The Contribution of State Tax Amnesties to Public Revenue Systems," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(3), pages 529-562, September.
    3. Alm, James & Beck, William, 1993. "Tax Amnesties and Compliance in the Long Run: A Time Series Analysis," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(1), pages 53-60, March.
    4. Stella, Peter, 1991. "An economic analysis of tax amnesties," Journal of Public Economics, Elsevier, vol. 46(3), pages 383-400, December.
    5. Carla Marchese & Alberto Cassone, 2000. "Tax Amnesty as Price-Discriminating Behavior by a Monopolistic Government," European Journal of Law and Economics, Springer, vol. 9(1), pages 21-32, January.
    6. Alm, James & Beck, William, 1993. "Tax Amnesties and Compliance in the Long Run: A Time Series Analysis," National Tax Journal, National Tax Association, vol. 46(1), pages 53-60, March.
    7. Pommerehne, Werner W & Zweifel, Peter, 1991. "Success of a Tax Amnesty: At the Polls, for the FISC?," Public Choice, Springer, vol. 72(2-3), pages 131-165, December.
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    Citations

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    Cited by:

    1. Miguel A. SANCHEZ VILLALBA, 2017. "On the effects of repeated tax amnesties," Journal of Economics and Political Economy, KSP Journals, vol. 4(3), pages 285-301, September.
    2. Bayer, Ralph-C. & Oberhofer, Harald & Winner, Hannes, 2015. "The occurrence of tax amnesties: Theory and evidence," Journal of Public Economics, Elsevier, vol. 125(C), pages 70-82.
    3. Gauthier, Stéphane & Laroque, Guy, 2014. "On the value of randomization," Journal of Economic Theory, Elsevier, vol. 151(C), pages 493-507.
    4. Jonathan Lewallen & Sean M. Theriault & Bryan D. Jones, 2016. "Congressional dysfunction: An information processing perspective," Regulation & Governance, John Wiley & Sons, vol. 10(2), pages 179-190, June.
    5. Javier Moreno & Jaime H. Beltrán & Leovardo Mata, 2019. "Efectos de corto y largo plazo de los programas de condonación de créditos fiscales en la recaudación del Impuesto al Valor Agregado," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 14(1), pages 113-128, Enero-Mar.

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    More about this item

    Keywords

    tax amnesty; tax evasion; tax policy;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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