EconPapers    
Economics at your fingertips  
 

Social networks and tax avoidance: evidence from a well-defined Norwegian tax shelter

Annette Alstadsæter (), Wojciech Kopczuk () and Kjetil Telle
Additional contact information
Annette Alstadsæter: Norwegian University of Life Sciences

International Tax and Public Finance, 2019, vol. 26, issue 6, 1291-1328

Abstract: Abstract In 2005, over 8% of Norwegian shareholders transferred their shares to new (legal) tax shelters intended to defer taxation of capital gains and dividends that would otherwise be taxable in the aftermath of a reform implemented in 2006. Using detailed administrative data, we identify family networks and describe how take-up of tax avoidance progresses within a network. A feature of the reform was that the eligibility to set up a tax shelter changed discontinuously with individual shareholding of a firm and we use this fact to estimate the causal effect of availability of tax avoidance for a taxpayer on tax avoidance by others in the network. We find that eligibility in a social network increases the likelihood that others will take-up. This suggests that taxpayers affect each other’s decisions about tax avoidance, highlighting the importance of accounting for social interactions in understanding enforcement and tax avoidance behavior, and providing a concrete example of optimization frictions in the context of behavioral responses to taxation.

Keywords: Tax avoidance; Social interactions; Family networks; Dividend tax reform; Administrative micro data; Tax shelters; Holding corporations (search for similar items in EconPapers)
JEL-codes: D83 H26 H31 H32 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10797-019-09568-3 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Social networks and tax avoidance: Evidence from a well-defined Norwegian tax shelter (2018) Downloads
Working Paper: Social Networks and Tax Avoidance: Evidence from a Well-Defined Norwegian Tax Shelter (2018) Downloads
Working Paper: Social networks and tax avoidance. Evidence from a well-defined Norwegian tax shelter (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:26:y:2019:i:6:d:10.1007_s10797-019-09568-3

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10797/PS2

Access Statistics for this article

International Tax and Public Finance is currently edited by Ronald B. Davies and Kimberly Scharf

More articles in International Tax and Public Finance from Springer, International Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-12-06
Handle: RePEc:kap:itaxpf:v:26:y:2019:i:6:d:10.1007_s10797-019-09568-3