TAX EVASION AND STATE PRODUCTIVITY—AN EXPERIMENTAL STUDY

Werner Güth (), Sabine Strauß and Matthias Sutter

Metroeconomica, 2005, vol. 56, issue 1, 85-100

Abstract: In an overlapping generations experiment with multiple families participants can support their parents directly and thereby reduce their tax burden or rely on tax‐financed old‐age support. State productivity is captured by the factor with which total tax revenues are multiplied to determine old‐age support. This factor is systematically varied from 0.75 to 1.25. Tax payments depend on declared endowment. Tax evasion is possible, but monitored. Our results suggest that state productivity influences neither direct support of own parents nor tax evasion. The main effect is that rich endowment triggers relatively low support of own parents and high (and more frequent) tax evasion.

Date: 2005
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https://doi.org/10.1111/j.1467-999X.2005.00208.x

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Working Paper: Tax evasion and state productivity – An experimental study (2002)
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