Tax Evasion, Information Reporting, and the Regressive Bias Prediction

Simon Halphen Boserup, Jori Veng Pinje

Publikation: Working paper

Abstract

Models of rational tax evasion and optimal enforcement invariably predict a regressive bias in the effective tax system, which reduces redistribution in the economy. Using Danish administrative data, we show that a calibrated structural model of this type replicates moments and correlations of tax evasion and audit probabilities once we account for information reporting in the tax compliance game. When conditioning on information reporting, we find that both reduced-form evidence and simulations exhibit the predicted regressive bias. However, in the overall economy, this bias is negated by the tax agency's use of information reports and revenue-maximizing disposition of audit resources.
OriginalsprogEngelsk
Antal sider52
StatusUdgivet - 2013

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