What Makes a Tax Evader?

Marcelo Bergolo, Martin Leites, Ricardo Perez-Truglia and Matias Strehl

No 28235, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Why do some individuals choose to evade taxes while others do not? One popular view is that some individuals cheat on their taxes because they are more dishonest, selfish, or perceive different social norms. There is, however, little direct evidence on this matter. In collaboration with the national tax agency in Uruguay, we address this question using a combination of surveys and administrative records. Leveraging a unique institutional setting, we measure individual-level evasion choices. We document significant variation in evasion decisions across individuals. For a subsample of 6,078 taxpayers, we use survey questions and incentivized laboratory games to measure traits such as honesty, selfishness, and perceived social norms. We find that these individual characteristics have some power to predict who evades taxes. However, other factors, such as the marginal tax rates and the behavior of peers, play a bigger role.

JEL-codes: H24 H26 K42 Z1 Z13 (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-cwa, nep-iue, nep-lam, nep-pbe, nep-pub and nep-soc
Note: LE PE
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