Indirect Auditing Methods for Individuals Subject to Income Tax

Do Individuals Perceive Income Tax Rates Correctly?

This article uses data from survey questions fielded on the 2011 wave of the Cognitive Economics Study to uncover systematic errors in perceptions of income tax rates. First, when asked about the marginal tax rates (MTRs) for households in the top tax bracket, respondents underestimate the top MTR on wages and salary income, overestimate the MTR on dividend income, and therefore significantly u...

Income Tax Buyouts and Income Tax Evasion

A tax buyout is a contract between tax authorities and a tax payer which reduces the marginal income tax rate in exchange for a lump-sum payment. While previous contributions have focussed on labour supply, we consider the interaction with tax evasion and show that a buyout can increase expected tax revenues. This will be the case if (1) the audit probability is constant and the penalty for eva...

Optimization Of The Competitive Model Of The Government And Tax Payer Under The Condition Of The Possible Existence Of Error In Auditing The Tax Payers Income Tax Report

Decentralizing Deterrence, with an Application to Labor Tax Auditing

Deterrence of illegal activities is frequently carried out by many atomistic auditors (tax auditors, law enforcement agents, etc.). Not much is known either normatively about the best way to incentivize the auditors, nor positively about what these incentives look like in real world organizations. This paper focuses on the positive question. It proposes a game-theoretic model of decentralized d...

optimization of the competitive model of the government and tax payer under the condition of the possible existance of error in auditing the tax paters income tax report