The Impact of Public Income Tax Return Disclosure on Tax Avoidance and Tax Evasion - Insights from an Agent-Based Model

Markus Diller, Johannes Lorenz and David Meier

FinanzArchiv: Public Finance Analysis, 2023, vol. 79, issue 3, 235-274

Abstract: We investigate how public tax return disclosure affects heterogeneous taxpayers' tax avoidance and evasion decisions when they maximize the sum of private expected utility (in line with Allingham and Sandmo, 1972) and social utility (which rewards behavior conforming to social norms). Taxpayers are located on a small-world network and directly observe their neighbors' wealth. Depending on what tax information is disclosed (nothing; net income only; both gross and net income), they can infer their neighbors' behavior with varying precision. Using an agent-based simulation, we find that partial disclosure of tax return information can yield more tax revenue than full disclosure.

Keywords: tax avoidance; tax evasion; agent-based modeling; social network; tax information disclosure (search for similar items in EconPapers)
JEL-codes: C63 H26 K42 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/the-impact- ... l-101628fa-2023-0007
Fulltext access is included for subscribers to the printed version.

Related works:
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:mhr:finarc:urn:doi:10.1628/fa-2023-0007

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

DOI: 10.1628/fa-2023-0007

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().