This paper shows that stricter enforcement may increase tax evasion. Individuals vote on a linear income tax which is used to finance lump sum transfers. Stricter enforcement may make redistributive taxation more attractive to the decisive voter. The tax rate and transfer may rise which in turn may increase tax evasion. An example shows that this result can actually occur. The paper also discus...

This paper examines the impact of US income and payroll taxes on the decision of wage-and-salary employees to become self-employed. I exploit variations in the tax treatment of wage and self-employment income using the Panel Study of Income Dynamics. Results show that differential taxation has significant effects on the probability of making a transition into self-employment. Reducing an indivi...

Marginal tax rate changes have the ability to affect fertility decisions by altering the opportunity cost of time through a change in the after-tax wage. Using a natural experiments framework developed to examine women’s labor force participation we investigate the effect of the Tax Reform Act of 1986 on marital fertility. The data were from the March Current Population Survey. We find the wome...

Offshore financial centers are almost never the final destination of foreign direct investments (FDI) they receive. A large portion these phantom FDI, which ultimately flow to third countries or return back source country in a process called round-tripping. This paper develops model onshore compete internationally with tax instruments attract capital from abroad, presence an offshore center tha...