scholarly journals Income Tax Evasion Responses to Tax Rate and Tax Enforcement Rate

2018 ◽  
Vol 6 (4) ◽  
pp. 269-279
Author(s):  
Insook Lee
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Tax Enforcement ◽  
Tax Rate

scholarly journals Income Tax Avoidance and Evasion

2016 ◽  
Vol 45 (6) ◽  
pp. 815-837 ◽  
Author(s):  
Duccio Gamannossi degl’Innocenti ◽  
Matthew D. Rablen
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Tax Avoidance ◽  
Expected Return ◽  
Tax Rate ◽  
Increasing Function ◽  
Reported Income

We characterize optimal individual tax evasion and avoidance when taxpayers “narrow bracket” the joint avoidance/evasion decision by exhausting all gainful methods for legal avoidance before choosing whether or not also to evade illegally. We find that (1) evasion is an increasing function of the audit probability when the latter is low enough, yet tax avoidance is always decreasing in the probability of audit; (2) an analogous finding to the so-called Yitzhaki puzzle for evasion also holds for tax avoidance—an increase in the tax rate decreases the level of avoided income and the level of avoided tax; and (3) that, holding constant the expected return to evasion, it is not always the case that the combined loss of reported income due to avoidance and evasion can be stemmed by increasing the fine rate and decreasing the audit probability.

scholarly journals Information processing in tax decisions: A MouselabWEB study on the Allingham and Sandmo model of income tax evasion

2020 ◽  
Author(s):  
Christoph Kogler ◽  
Jerome Olsen ◽  
Martin Müller ◽  
Erich Kirchler
Keyword(s):  
Tax Evasion ◽  
Information Acquisition ◽  
Income Tax ◽  
Tax Compliance ◽  
Relevant Information ◽  
Expected Value ◽  
Decision Under Uncertainty ◽  
Tax Rate ◽  
Compliance Decisions ◽  
Expected Values

The highly influential Allingham and Sandmo model of income tax evasion framed the decision whether to comply or to evade taxes as a decision under uncertainty, assuming that taxpayers are driven by utility-maximization. Accordingly, they should choose evasion over compliance if it yields a higher expected profit. We test the main assumptions of this model considering both compliance decisions and the process of information acquisition applying MouselabWEB. In an incentivized experiment, 109 participants made 24 compliance decisions with varying information presented for four within-subject factors (income, tax rate, audit probability, and fine level). Additional explicit expected value information was manipulated between-subjects. The results reveal that participants attended to all relevant information, a prerequisite for expected value like calculations. As predicted by the Allingham and Sandmo model, choices were clearly influenced by deterrence parameters. Against the assumptions, these parameters were not integrated adequately, as evasion did not increase with rising expected rate of return. More transitions between information necessary for calculating expected values did not result in higher model conformity, just as presenting explicit information on expected values. We conclude that deterrence information clearly influences tax compliance decisions in our setting, but observed deviations from the model can be attributed to failure to integrate all relevant parameters.

Assesment of the Results of Personal Income Tax Reform in Russia

2003 ◽  
pp. 61-77
Author(s):  
S. Sinelnikov-Murylev ◽  
S. Batkibekov ◽  
P. Kadochnikov ◽  
D. Nekipelov
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Tax Reform ◽  
Personal Income ◽  
Vertical Equity ◽  
Personal Income Tax ◽  
Tax Base ◽  
Tax Rate ◽  
Tax Revenues ◽  
Income Tax Reform

The paper contains results of the analysis of personal income tax reform in Russia in 2000, including the influence of the reform on tax base, tax revenues and progressivity of income taxation. On the basis of the theoretical model the authors formulate two main hypotheses, concerning the influence of major factors on personal income tax revenues and tax base. The first hypothesis implies that the decrease in marginal income tax rate caused the decrease in personal income tax evasion, increase in tax revenues and tax base. The second hypothesis is that the decrease in tax evasion, especially among taxpayers with high incomes, increased their tax burden and, as a result, the level of vertical equity. The paper also includes the results of empirical tests of the above hypotheses about the change in tax evasion and progressivity using the regional data in 2000 and 2001; a number of measurers in the sphere of economic policy is put forward.

scholarly journals Criminal Enforcement and the IRS

1967 ◽  
Vol 13 (2) ◽  
pp. 352-355
Author(s):  
Robert L. Spatz
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
White Collar ◽  
Internal Revenue Service ◽  
Tax Burden ◽  
Fair Share ◽  
Tax Enforcement ◽  
Internal Revenue ◽  
Criminal Sanctions

This nation is run, essentially, by income tax collections, and the Internal Revenue Service painstakingly enforces criminal sanctions on would-be evaders. Tax evasion strikes more directly at the sovereignty, and less directly at individual citizens, than other white-collar crimes. The raison d' etre for vigorous crimi nal tax enforcement is to deter tax evasion and to assure the taxpaying public that each individual taxpayer is held account able for his fair share of the tax burden.

Tax Amnesty 2004/2005 – An Appropriate Revenue Tool?

2004 ◽  
Vol 5 (4) ◽  
pp. 339-346 ◽  
Author(s):  
Martin Kellner
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Corporate Tax ◽  
Tax Rate ◽  
The Past ◽  
Inheritance Tax ◽  
Tax Amnesty ◽  
Tax Deductions ◽  
Wealth Tax ◽  
Gift Tax

Tax evasion is punishable. However, by tax amnesty the state waives punishment and gives tax dodgers the chance to return to honesty. The “Act To Promote Tax Honesty” offers people who evaded taxes between the years 1993 and 2002 an opportunity to wipe the slate clean by declaring their concealed income up to 2005. This offer applies to income tax, corporate tax, turnover tax, wealth tax, trade tax, inheritance tax, gift tax and tax deductions pursuant to the Einkommensteuergesetz (Income Tax Act). Amnesty participants must pay a reduced tax rate of 25 percent on declared income within ten days after the declaration. For income and corporate tax the assessment basis is reduced to 60 percent. Thereby the new law grants the repentant tax evaders a tax rate of 15 percent rather then usual up to 48 percent on the profits they gained in the past ten years.

scholarly journals Pengaruh Penerapan Tarif Tunggal Pajak Penghasilan Badan terhadap Indikasi Penggelapan Pajak

2019 ◽  
Vol 19 (1) ◽  
pp. 96-117
Author(s):  
Bramastia Candra Putra ◽  
Riatu Mariatul Qibthiyyah
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Corporate Income Tax ◽  
Firm Level ◽  
Tax Rate ◽  
Empirical Results ◽  
Level Data ◽  
Sample Data ◽  
Firm Level Data ◽  
Tax Audit

This paper investigates the dierence eects of progressive rate and single rate implementation on corporate income tax to tax evasion indication. Using firm level data of tax audit results as a measure of tax evasion indication for six years observations. The empirical results from the sample data show that the implementation of single rate on corporate income tax reduces the tax evasion indication. In addition, the results show that the higher the marginal income tax rate, the higher the tax evasion indication. ======================== Paper ini menginvestigasi perbedaan pengaruh penerapan tarif pajak progresif dan tarif pajak tunggal pada Pajak Penghasilan (PPh) Badan terhadap indikasi penggelapan pajak. Paper ini menggunakan data hasil pemeriksaan pajak pada level perusahaan sebagai ukuran indikasi penggelapan pajak selama enam tahun observasi. Hasil studi empiris pada sampel data menunjukkan bahwa penerapan tarif pajak tunggal pada PPh Badan mengurangi tingkat indikasi penggelapan pajak. Selain itu, semakin tinggi tarif pajak penghasilan cenderung menstimulasi peningkatan indikasi penggelapan pajak.

Revenue Enhancement through Increased Motor Fuel Tax Enforcement

1996 ◽  
Vol 1558 (1) ◽  
pp. 67-73
Author(s):  
Stephen J. Baluch
Keyword(s):  
Diesel Fuel ◽  
Tax Evasion ◽  
Motor Fuel ◽  
Tax Compliance ◽  
Fiscal Year ◽  
Federal State ◽  
Tax Enforcement ◽  
Joint Project ◽  
Tax Rate ◽  
Fuel Tax

The development of the FHWA fuel tax compliance program is described, and estimates of additional motor fuel tax revenues generated by enforcement programs are presented. Substantial revenue losses caused by motor fuel tax evasion schemes were discovered in the mid-1980s. Since 1986, the Internal Revenue Service and FHWA have worked cooperatively to reduce fuel tax evasion by supporting changes in tax collection procedures and additional enforcement resources. Since fiscal year 1990, FHWA has provided funding to supplement state and IRS fuel tax enforcement resources under the auspices of the Joint Federal/State Motor Fuel Tax Compliance Project (joint project). The Intermodal Surface Transportation Efficiency Act of 1991 provided $5 million annually through 1997 for the joint project. Enforcement activities directly contribute hundreds of millions of dollars to the Highway Trust Fund (HTF) and state transportation funds, a yield estimated at $10 to $18 per dollar spent on these programs. Furthermore, the Omnibus Budget Reconciliation Act of 1993 moved the incidence of the federal excise tax on diesel fuel to the point of removal from bulk storage at the terminal and required tax-exempt diesel fuel to be dyed. The HTF revenue from the diesel fuel tax has increased more than $1 billion in the year since these changes went into effect on January 1, 1994, net of the tax rate increases also enacted in 1993. Some $600 million to $700 million of this increase has been estimated to be the result of improved compliance.

scholarly journals Do Taxpayers Bunch at Kink Points?

2010 ◽  
Vol 2 (3) ◽  
pp. 180-212 ◽  
Author(s):  
Emmanuel Saez
Keyword(s):  
Tax Evasion ◽  
Income Tax ◽  
Earned Income Tax Credit ◽  
The Self ◽  
Tax Credit ◽  
Marginal Tax Rate ◽  
Earned Income ◽  
Tax Rate ◽  
The Us ◽  
Return Data

This paper uses tax return data to analyze bunching at the kink points of the US income tax schedule. We estimate the compensated elasticity of reported income with respect to (one minus) the marginal tax rate using bunching evidence. We find clear evidence of bunching around the first kink point of the Earned Income Tax Credit but concentrated solely among the self-employed. A simple tax evasion model can account for those results. We find evidence of bunching at the threshold of the first income tax bracket where tax liability starts but no evidence of bunching at any other kink point. (JEL H23, H24, H26)

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