Income Tax Evasion in a Unionised Labour Market

Labour market outcomes can depend on tax evasion since the returns from working are affected by the amount of taxes paid. In this paper, unionised workers are assumed to select the income which they declare. The rational trade union takes this decision into account. It is shown that the employment effects of a linear income tax are not altered qualitatively by tax evasion if the fine for evasion is a function only of the evaded tax. Moreover, the consequences of changes in the tax enforcement system are determined by the ability to choose evasion activities optimally. The existence of unrestricted tax evasion opportunities lowers wages.     

Tax Amnesties In A Dynamic Model of Tax Evasion

We present a dynamic model of tax evasion, where tax liabilities last for two periods and the probability of an inspection decreases with the sum of taxes evaded this period plus taxes evaded last period. We show that a tax amnesty that pardons more than the evasion penalties (an extensive amnesty) can temporarily improve compliance. Whenever the inspection technology improves, steady state compliance also improves, but the economy takes time to transit from one steady state to the other. We show that an amnesty may accelerate this transit, or even make it instantaneous if the amnesty is extensive enough.     

Tax evasion and Ricardian equivalence

This paper studies whether the Ricardian equivalence holds in a context with tax evasion. In such a context, the degree of uncertainty becomes endogenous since agents control the distribution of their future income through their income report. We find that Ricardian equivalence holds when proportional fines are imposed on evaded taxes, but does not hold when the fines are on the amount of unreported income. We also show that it is possible to explain the empirical negative relation between tax rates and declared income when the path of government spending remains unchanged.     

Optimal Tax Policy, Market Imperfections, and Environmental Externalities in a Dynamic Optimizing Macro Model

This paper develops a dynamic real business cycle model that highlights pollution externalities (on welfare and production) and market imperfections and uses it to determine the socially optimal tax policy that encompasses labor income, capital income, and emission taxes. We show that the optimal tax on capital and labor income only addresses the production inefficiency (and is time-invariant), while the tax on the environmental externalities affects both the production inefficiency and the environmental spillovers (and is time-varying). More interestingly, the socially optimal emission tax will be characterized by a Keynesian-like stabilizer that is designed to mitigate business cycle fluctuations, i.e., that will stimulate the economy with a lower emission tax during recessions. In a positive analysis, we show that the beneficial effects arising from pollution taxation will become larger the greater is the degree of the firms' monopoly power. In addition, a triple dividend in terms of improving environmental quality and increasing employment and firms' profit can be simultaneously realized if the environmental production externality is more significant and if the elasticity of intertemporal substitution in consumption is relatively small.     

地方税收效率及公平性实证研究

在现行经济及税收制度下,增值税和行为税收入比重提升会提高资本要素的产出效率;营业税和企业所得税比重的增加在提高资本要素产出效率的同时,却会降低劳动要素的产出效率;个人所得税和财产税比重提高有助于提升劳动要素的产出效率,而后者同时会降低资本产出效率;资源税类收入比重提高将会降低资本要素产出效率;流转税、所得税、行为税和财产税占税收收入比重的增加都会引起经济的总体产出的减少;我国地方税收收入具有显著的公平效应,其中所得税和财产税的公平效应相对更强,资源税及增值税也具有明显的公平收入分配的作用。     

Trading Off Tax Distortion and Tax Evasion

Income tax evasion is modeled as a risky activity and integrated into a standard optimal tax problem in which there is a good whose sales are observable. If the penalty for evasion is proportional to the tax evaded (the Yitzhaki scheme), the optimal tax structure is unaffected by evasion. If the penalty is proportional to unreported income (the Allingham–Sandmo scheme), it is efficient to tax both the observable good and income. The cost of the risk of tax evasion is traded off against the distortion from taxing the observable good. For equal penalties, Allingham/Sandmo is more efficient than Yitzhaki.     

Evasion Effects of Changing the Tax Mix*

This study assesses claims that shifting toward greater indirect taxes will reduce evasion, thereby improving the distribution of real net incomes and generating a 'fiscal dividend'. Practical considerations suggest that industry sectors which evade income taxes will also be strongly inclined to evade indirect taxes on their output. A general equilibrium analysis finds that changing the tax mix will have little or none of the claimed anti–evasion or distributional effects. Increased indirect taxes on evaders' consumption purchases will be shifted onto suppliers in the compliant sector. Evaders will end up evading less income taxes but evading more indirect taxes     

Tax evasion,social norms,and economic growth

We propose a theoretical model to account for the negative relationship between tax evasion and economic development. More precisely, we integrate tax morale into a dynamic OLG model of tax evasion. Tax morale is modeled as a social norm for tax compliance. We show that accounting for such nonpecuniary costs of evasion may explain (a) why the share of evaded taxes over GDP decreases when countries grow and (b) that tax morale is positively correlated with the level of GDP per capita. Finally, a higher tax rate increases aggregate evasion and the number of evaders when taxpayers decisions are interdependent.     

中国的税收结构、经济增长与收入分配

本文通过实证分析,说明在中国现阶段的经济制度和税收结构下,流转税类、所得税类、资源税类和财产税类份额的增加会扩大资本所有者和劳动所有者市场收入的分配差距,而特定目的税类和行为税类份额的增加则会缩小资本要素与劳动要素的收入分配差距。同时,所得税类、资源税类和行为税类份额的增加会提高经济的总体规模,而财产税类和特定目的税类份额的增加则会降低经济的总体规模。这说明在现阶段的中国经济中,有必要对所得税类和财产税类进行结构和职能两方面改革,使这两种税能够体现社会公平的税收职能。单纯地从税收结构的数量调整上讲,目前应提高所得税类的税收份额,并降低财产税类(即房地产税)的税收份额。     

Tax evasion and competition

Using a Cournot oligopoly model with an endogenous number of firms and evasion of indirect taxes, we show that more intense competition may have the negative side effect of increasing tax evasion, thereby, lowering public revenues and welfare. This will be the case if market entry costs decrease. A similar result will hold if marginal production costs fall and demand is either weakly concave, or convex and inelastic. The result of more competition, less evasion and higher public revenues will be obtained if (a) marginal production costs fall and demand is convex and elastic or (b) the demand elasticity increases. As a policy implication, we prove that tax enforcement should be intensified if there is a negative trade‐off between competition and evasion.     

现行税制对劳动力供给影响的理论与实证分析

税收对劳动力供给的影响取决于征税后收入效应与替代效应的对比.然而,不同收入水平的国家以及不同税制结构下所产生的收入效应与替代效应存在一定差异.本文从理论与实证相结合的角度,运用OLS方法,分析了在以商品劳务税为主体的税制结构下,中国现行税制对劳动力供给的影响,认为对劳动所得征税会产生收入效应大于替代效应的结果,最后提出了缓解劳动供求结构性矛盾的税制改革取向.     

Optimal taxes on wealth and consumption in the presence of tax evasion

This article incorporates tax evasion into an optimum taxation framework with individuals differing in earning abilities and initial wealth. We find that despite the possibility of its evasion a tax on initial wealth should supplement the optimal nonlinear income tax, given a positive correlation between initial wealth and earning abilities. Further, even if income and initial wealth are taxed optimally, it is still desirable to levy a tax on commodities, though it can be evaded as well. Thus, our result provides a rationale for a comprehensive tax system. Optimal tax rates on commodities differ in general, however for the special case of a uniform evasion technology equal rates are optimal if preferences are homothetic and weakly separable.     

Production Efficiency and the Direct-Indirect Tax Mix

In the design of the optimal direct/indirect tax mix, the canonical view was laid by Atkinson and Stiglitz (1976) who showed that commodity taxes are unnecessary in an economy in which there is an optimal nonlinear income tax provided that commodities are separable from labor in the utility functions of all taxpayers, that the aggregators over these commodities are ordinally equivalent and that wages are fixed. When wages are endogenous, Naito (1999) showed that this result may not hold and in addition that production efficiency may not be Pareto optimal. Given an optimal nonlinear income tax, we show that production inefficiency is Pareto optimal if the aggregate technology set is strictly concave. The Atkinson–Stiglitz condition is neither necessary nor sufficient for zero commodity taxation and commodity taxes are part of almost all Pareto optima.     

上市公司所得税率变化的敏感性分析

从 2 0 0 2年起除高科技类和西部地区的上市公司以外 ,其它上市公司不再享有所得税地方返还政策 ,而且我国加入WTO以后所得税也面临着改革。对于上市公司来说 ,法定税率 (LTR)变化对其实际税率 (ETRs)有多大的影响就成为政策制定者的一个现实的问题。本文首先对中国上市公司自 1 994— 2 0 0 0年执行的法定所得税税率的现状作一分析 ;然后 ,用 1 86家上市公司的样本进行检验 ,结果发现法定税率变化对实际税率的影响只有法定税率变化的 0 50 2 ,在分组及分年度检验中也得到了类似的结论。     

The Enforcement of Income Tax Laws: Efficiency Implications*

Complete enforcement of income tax laws, designed to reduce income tax evasion to zero, is shown to be inefficient. Starting from a 'full compliance' policy, it is shown that a marginal reduction in enforcement will always allow for tax reductions, hence increases in the ex-ante utility levels of taxpayers. Only if the tax structure is rigid can full compliance be optimal.     

Efficient Environmental Policy with Imperfect Compliance

Discussions of efficient environmental policytend to recommend taxes rather than quotas ongrounds of efficiency; a uniform tax willequalize marginal abatement cost betweenpolluters. When polluters' actions are imperfectly observable, the distinction betweentaxes and quotas becomes less clear. Taxes maybe evaded by underreporting of emissions, whilequota violations will not always be discovered.This paper explores the conditions under whichthe efficiency properties of taxes continue tohold even when evasion is possible, and theextent to which the fine for quota violationsplays the same role as a tax on emissions withsimilar efficiency properties.     

Involuntary Unemployment and Environmental Policy: The Double Dividend Hypothesis

An environmental tax reform might bring about gains over and above improved environmental quality. In particular, if tax revenues from environmental taxes are used to reduce the tax on wage income, positive employment effects can result in second-best economies. An efficiency wage model is used to analyze the impact of an ecological tax reform on involuntary unemployment. The government controls emissions by selling emission permits. Employment of labor and wages are determined endogenously. Conditions are identified under which an environmental tax reform reduces unemployment and increases welfare.     

Environmental Taxes and the Double Dividend

This paper investigates the employment and welfare effects of an environmental tax reform, i.e. raising environmental taxes and using the revenues to cut labor taxes. The analysis reveals that such a reform does not necessarily raise employment: it may replace explicit labor taxes by higher implicit taxes on labor. However, employment may rise if the reform succeeds in shifting the tax burden away from workers to those outside the labor force. The paper explores also how distributional concerns affect optimal environmental taxes.     

Tax enforcement,tax compliance and tax morale in transition economies: A theoretical model

The focus of this paper is the analysis of the relationship between tax enforcement, tax compliance and tax morale within countries characterised by rapid introduction of market institutions and slow evolution of political regimes, such as transition economies. The paper investigates a coordination game in which the government is ex-ante committed to tax enforcement and can observe the proportion of tax-compliant agents in the economy. In turn, two groups of agents (third-party reporting and self-reported income) are keen to evade taxes unlawfully but have limited information on how many others evade taxes; their tax morale is therefore an endogenous function of agents' perception on tax compliance. The model predicts that the lower the quality of political institutions and the weaker tax morale, the less tax compliance can be achieved. The third-party reporting group will also be bearing higher tax burden than the self-reported income group. The model entails that having political institutions of good quality is not a sufficient condition to conduce to tax enforcement or tax compliance. Due to the endogenous role of tax morale, the government could be pushed ex-post towards poor or no tax enforcement. If good political institutions are not accompanied by good information about the enforcement of tax collection, there is scope for co-existence of poor tax enforcement, low tax compliance and weak tax morale. As such, this model well describes the tax evasion behaviour observed since the outset of transition from planned to market economy.     

The effects of joint taxation of married couples on labor supply and non-wage income

The United States changed its tax treatment of married couples in 1948, from a system in which each spouse paid taxes on his or her own income to a system in which a married couple is taxed as a unit. The switch from separate to joint taxation changed incentives for labor supply and asset ownership. This paper investigates the effects of the conversion to joint taxation, taking advantage of a natural experiment created by cross-state variation in property laws. Married individuals in states with community property laws had always been taxed as if each spouse had earned half of the couple's income, and thus were unaffected by the 1948 legal change. Comparing the behavior of highly-educated taxpayers in affected and unaffected states indicates that the tax change is associated with a decline of approximately 2 percentage points in the employment rate of married women, consistent with the higher first-dollar tax rates they faced after 1948. Women married to self-employed men were also less likely to have non-wage income after 1948, reflecting pre-1948 allocation of family assets to wives for tax purposes. The effects of joint taxation on married men's labor force participation and non-wage income holding are generally not statistically significant.