Tax evasion and tax avoidance

Annette Alstadsæter, Niels Johannesen, Ségal Le Guern Herry and Gabriel Zucman

Journal of Public Economics, 2022, vol. 206, issue C

Abstract: Exploiting rich administrative data and salient policy variation, we study the substitution between illegal tax evasion and legal tax avoidance. By increasing its enforcement effort, the Norwegian government pushed many wealthy individuals to disclose assets previously hidden abroad. We find that the taxes paid by these individuals rise 30% at the time of disclosure and that the rise is sustained over time. After stopping to evade, taxpayers do not start avoiding more. Our results suggest that cracking down on evasion by the wealthy can be an effective way to raise tax revenue, increase tax progressivity, and ultimately reduce inequality.

Keywords: Tax evasion; Tax avoidance; Tax enforcement; Hidden wealth (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:206:y:2022:i:c:s0047272721002231

DOI: 10.1016/j.jpubeco.2021.104587

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