For the first time we develop a time series of tax evasion (in % of official GDP) for 38 OECD countries over the period 1999 to 2010 based on MIMIC model estimations of the shadow economy. Considering indirect taxation and self-employment as the driving forces of tax evasion, we observe a...

In the simple Allingham-Sandmo portfolio model of tax evasion an expected utility maximizer will cheat more than what is estimated in empirical studies. Two main types of explanation have been suggested as solutions to this puzzle: (1) Tax payers act according to some non-expected utility...

Supporters of public disclosure of personal tax information point to its deterrent effect on tax evasion, but this effect has not been empirically explored. Although Norway has a long tradition of public disclosure of tax filings, it took a new direction in 2001 when anyone with access to the...

Relative consumption effects or status concerns that feature jealousy (in the sense of Dupor and Liu, AER 2003) boost consumption expenditure. If consumption is financed by labour income, such status considerations increase labour supply and, hence, the tax base. A higher taxable income, in...

If an additional competitor reduces output per firm in a homogenous Cournot-oligopoly, market entry will be excessive. Taxes can correct the so-called business stealing externality. We investigate how evading a tax on operating profits affects the excessive entry prediction. Tax evasion raises...

Self-employed individuals have arguably greater opportunities than wage earners to underreport their incomes. The incentives for underreporting should be especially strong in an economy with generally high taxes. This paper uses recent income and expenditure data to examine the extent of...

Firms may evade taxes on profits and can also avoid fulfilling legal restrictions on production activities by bribing bureaucrats. It is shown that the existence of tax evasion does not affect corruption activities at the firm level, while the budgetary repercussions of tax evasion induce less...

This paper models payment evasion as a source of profit by letting the firm choose the purchase price and the fine imposed on detected payment evaders. For a given price and fine, the consumers purchase, evade payment, or choose the outside option. We show that payment evasion leads to a form of...

Both buyers and sellers of goods and services may benefit from letting their economic transactions go unrecorded for tax purposes. The supplier reduces his tax burden by underreporting income, whereas the consumer gains from buying a non-taxed lower-priced product. The distributional...

The Savings Directive has been celebrated as a major political break-through in coordinating taxation in Europe. Against this background, the present paper evaluates the real-world effects of this directive. The directive has left a loophole by providing grandfathering (exemption from...