This paper reviews the economic effects of the EU Savings Taxation Directive. The Directive aims at enabling taxation of foreign interest payments received by individuals in accordance with the rules of their State of residence. The data suggest that the Directive, which is based on automatic...

This paper develops a competition theory framework that evaluates an important aspect of the OECD's Harmful Tax Practices Initiative against tax havens. We show that the sequential nature of the process is harmful and more costly than a "big bang" multilateral agreement. The sequentiality may...

It is standardly assumed that individuals adjust to perceived unfairness or norm violations in precisely the same area or relationship where the original offense has occurred. However, grievances over being exposed to injustice may have even broader consequences and also spill over to other...

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...

The paper studies the revenue, efficiency, and distributional implications of a simple strategy of offsetting tariff reductions with increases in destination-based consumption taxes so as to leave consumer prices unchanged. We employ a dynamic micro-founded macroeconomic model of a small open...

Corporate patents are perceived to be the key profit-drivers in many multinational enterprises (MNEs). Moreover, as the transfer pricing process for royalty payments is often highly intransparent, they also constitute a major source of profit shifting opportunities between multinational...

In this paper we analyze the influence of direct democratic institutions on the size and development of the shadow economies. The framework developed predicts a negative relationship between the degree of direct democracy and the size of the shadow economy. Countries where direct democratic...

A strictly risk-averse individual with an exogenous gross income in period one can acquire human capital in the same period and evade taxes. Period-two income rises with educational investments in period one and can also be hidden from tax authorities. It is shown that a greater tax...

This paper studies the design of indirect redistributive taxation and of corrective taxation, as well as the formation of equilibrium indirect tax policies via a political process, in the presence of status goods, allowing for the possibility that illegal copies of those goods may be purchased...

This paper studies the role of beliefs about own performance or appearance for compliance at the customs. In an experiment in which underreporting has a higher expected payoff than truthful reporting we find: a large share, about 15-20 percent of the subjects, is more compliant if they have...