Intra-household Tax Avoidance: An Application to Swedish Household Data

Thomas Aronsson (), Sven-Olov Daunfeldt () and Magnus Wikström ()
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Thomas Aronsson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 572, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: This paper analyzes whether households use house interest deductions to minimize family tax payment. By applying a household model in which tax deductions are associated with a cost, we relate the likelihood of minimizing the tax payment to variables associated with the budget constraint and other household characteristics. The results show that 88 percent of the households follow an optimal (arbitrage free) avoidance strategy, and the likelihood of minimizing taxes is influenced by income, age and house ownership experience.

Keywords: Income taxation; Tax avoidance; Housing deductions (search for similar items in EconPapers)
JEL-codes: H24 H29 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
Date: 2001-11-01
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