Taxpayers differ in ability to evade tax, and the likelihood of getting caught for cheating may depend on such ability. By assuming that the tax collection agency can classify taxpayers into different audit classes on the basis of a parameter which represents evasion ability, I derive the...

It is well known that the government’s complete failure to enforce a law can nullify that law. But what are the effects of partial enforcement? This Article shows that imperfect enforcement can alter the de facto content of the written law in predictable and beneficial ways. Specifically, in...

Governments increasingly use changes in tax rules to combat evasion. We develop a general approach to point-identify tax compliance along with supply and demand elasticities; identification requires data on prices and quantities before and after changes in tax enforcement and a demand or supply...