Tax evasion and avoidance

Franzoni, Luigi Alberto

doi:10.4337/9781781950210.00017

Cited by 19 publications

(26 citation statements)

References 86 publications

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“…The literature on tax evasion is devoted mainly to income taxation, and concentrates on how evasion can be deterred through detection and sanctions (Franzoni, ) . Rational consumers decide whether or not to evade payment of their taxes based on a cost‐benefit comparison .…”

Section: Introductionmentioning

confidence: 99%

“…In the theoretical literature on tax evasion, the seminal work by Allingham and Sandmo (1972) is the first to consider tax evasion as a decision under risk. 1 The literature on tax evasion is devoted mainly to income taxation, 2 and concentrates on how evasion can be deterred through detection and sanctions (Franzoni, 1999). 3 Rational consumers decide whether or not to evade payment of their taxes based on a cost-benefit comparison.…”

Section: Introductionmentioning

confidence: 99%

“…Refer to Andreoni et al . (), Franzoni (), Slemrod (), Slemrod and Yitzhaki () for surveys of the rich literature, both theoretical and empirical, that followed Allingham and Sandmo ().…”

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confidence: 99%

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Itemised Deductions: A Device to Reduce Tax Evasion

Piolatto

2015

German Economic Review

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With direct incentives and sanctions being the most common instruments to fight tax evasion, the theoretical literature has tended to overlook indirect schemes, such as itemised deductions, in which one agent's behaviour affects the likelihood that others will declare their revenue. Itemised deductions provide an incentive for consumers to declare their purchases. This induces a partial shift in the demand from the black market to the legal one, for consumers need a transaction receipt to enjoy the tax deduction. I show that it is possible to increase tax proceeds by choosing a suitable level of itemised deduction, and this, for any level of taxation. Indeed, the cost for the tax authority on the consumers' side is more than compensated for by the extra proceeds generated on the sellers' side.JEL Classification: H00; H20; H26; H30

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Itemised Deductions: A Device to Reduce Tax Evasion

Piolatto

2015

German Economic Review

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“…Bigio and Zilberman (2011), Carillo et al (2011), and Tonin (2013. Models with a continuum of tax payers and cut-off rules for auditing are usually characterised by bunching (at the cut-off), but not necessarily by the absence of a whole interval of income declarations (see Franzoni 2009 for a survey). Similar features, that is, bunching and the absence of certain income declarations, will result if there is no evasion while taxation entails fixed administrative cost, such that it may be optimal to effectively exempt those with low (potential) tax bases from taxation (cf.…”

Section: Modelmentioning

confidence: 99%

Income tax buyouts and income tax evasion

Goerke

2014

Int Tax Public Finance

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Income Tax Buyouts and Income Tax Evasion Abstract A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for evasion is a function of undeclared income or (2) the penalty depends on the amount of taxes evaded, and authorities use information about income generated by the decision about a tax buyout offer when setting audit probabilities. Since individuals will only utilise a tax buyout if they are better off, higher tax revenues imply that such contracts can be Pareto-improving. Terms of use: Documents in EconStor mayJEL-Code: D820, H210, H240, H260.

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“… 4 The issue of enforcement has a major role in explaining tax evasion. See, among others, Allingham and Sandmo (1972), Engel and Hines (1999), Franzoni (1999), and Snow and Warren (2005). …”

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confidence: 99%

Why Do Underground Reducing Policies Often Fail Their Scope? Some Answers From the Italian Experience

Chiarini

Domizio

Marzano

2009

Economics & Politics

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Several European countries, facing a sizeable underground economy, often adopt underground reducing policies mainly based on incentives in the tax-benefit system. Since empirical evidence manifests a substantial failure of such policies, we construct a simple model to indicate the crucial aspects of this failure. To this end we consider a tax-evading firm, allocating work in the official and underground sector, where it is not taxed. With a view to reducing underground employment, the government may decide to launch an amnesty for past social security non-compliance, while providing fiscal incentives for new hiring in order to encourage a process of worker regularization. Allowing for endogenous enforcement, we find that the reputation of policy-makers in combating tax evasion proves crucial in determining the success of such a policy. Copyright 2009 Blackwell Publishing Ltd.

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Tax evasion and avoidance

Cited by 19 publications

References 86 publications

Itemised Deductions: A Device to Reduce Tax Evasion

Itemised Deductions: A Device to Reduce Tax Evasion

Income tax buyouts and income tax evasion

Why Do Underground Reducing Policies Often Fail Their Scope? Some Answers From the Italian Experience

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