Under the Nordic dual income tax system, the taxpayer's total tax bill depends not only on his total income but also on the division of that income between capital income and labor income. This has created new room for tax avoidance, especially for active owners of (closed) corporations. For...

It is commonly argued that high tax rates motivate individuals to start a business as it is easier to avoid and evade taxes if self-employed compared to employed. If this is the case we would expect small business owners to be more responsive to tax rate changes than employees. This study...

This paper analyzes whether households use house interest deductions to minimize family tax payment. By applying a household model in which tax deductions are associated with a cost, we relate the likelihood of minimizing the tax payment to variables associated with the budget constraint and...

This paper develops and estimates a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The estimated latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the...

This paper develops a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the information from the...

Using new time-series data for the size of the Canadian underground economy, we examine the relationship between unreported and measured GDP in that country. Granger causality tests are conducted, with a proper allowance for the non-stationarity of the data. We find that there is clear evidence...

This paper develops and estimates a structural, latent variable, model for the hidden economy in New Zealand, and a separate currency-demand model. The estimated latent variable model is used to generate an historical time-series index of hidden economic activity, which is calibrated via the...

This paper analyzes a large sample of unit records relating to tax audit cases for individual New Zealand firms, undertaken by Inland Revenue New Zealand over the period 1993 to 1995. The data are used to reveal the key characteristics that are associated with firms that comply, or fail to...

This paper duscusses tha author's wok on measuring and modelling the New Zealand underground economy, 1968-1994. Particular attention is paid to the relationship between this activity and taxation policy. An optimal level for the effective tax rate is reported, in terms of maximizing the impact...