Can Tax Evasion Tame Leviathan Governments?

value added tax and tax evasion

The phenomenon of tax evasion has been always one of the most major issues among economists due to it's devastating effects on the economy and the process of economic development. Many scholars have always sought to provide solutions to reduce and limit tax evasion. The introduction of the VAT system can be seen as a milestone in the area of economic transparency and tax evasion, which refers t...

The taming of Leviathan: Competition among governments

Tax Optimization under Tax Evasion

All opinions expressed here are those of the authors and not those of the Economics Education and Research Consortium Research dissemination by the EERC may include views on policy, but the EERC itself takes no institutional policy positions This paper considers the problem of determining the optimal taxation for a group of individuals with random, independent and identically distributed income...

Tax Evasion and Coordination

We consider corporate tax evasion as a decision a¤ecting business partners. There are costs of uncoordinated tax reports, both in terms of catching inspectors’attention and running accounts. If these costs are small, there exist a unique Nash equilibrium of the game between the tax authority and a population of heterogenous …rms. In this equilibrium, the miscoordination costs enhance non-compli...

Tax Evasion and Inequality∗

This paper attempts to estimate the size and distribution of tax evasion in rich countries. We combine random audits—the key source used to study tax evasion so far—with new micro-data leaked from large offshore financial institutions—HSBC Switzerland (“Swiss leaks”) and Mossack Fonseca (“Panama Papers”)—matched to population-wide wealth records in Norway, Sweden, and Denmark. We find that tax ...