Offshore tax evasion and wealth inequality: Evidence from a tax amnesty in the Netherlands

Wouter Leenders, Arjan Lejour, Simon Rabate and Maarten van ’t Riet,

Journal of Public Economics, 2023, vol. 217, issue C

Abstract: Exploiting unique datasets covering over 29,000 tax evaders in the Netherlands, we investigate the distribution of tax evasion and its implications for the measurement of wealth inequality. Tax evasion is concentrated at the top of the wealth distribution with over 10% of the wealthiest 0.01% of households – the “super rich” – evading taxes. At the top, households evade around 8% of their true tax liability. The “merely rich” (P90-P99.9) own 67% of hidden wealth, while the “super rich” account for only 7%. Consequently, the correction for offshore wealth has a modest effect on top wealth shares. We describe a number of explanations for the distribution of tax evasion by Dutch households: low-cost tax evasion opportunities in neighbouring countries for the “merely rich”, sophisticated forms of tax evasion for, low effective tax rates on and migration to low tax jurisdictions by the “super rich”. Taken together, these explanations suggest that the distribution of tax evasion strongly depends on a country’s geographical and institutional settings.

Keywords: Inequality; Wealth; Tax evasion; Netherlands (search for similar items in EconPapers)
JEL-codes: E21 H26 H87 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Offshore tax evasion and wealth inequality: Evidence from a tax amnesty in the Netherlands (2023)
Working Paper: Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands (2020)
Working Paper: Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands (2020)
Working Paper: Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands (2020)
Working Paper: Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:217:y:2023:i:c:s0047272722001876

DOI: 10.1016/j.jpubeco.2022.104785

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