Tax Evasion and Tax Progressivity

Laszlo Goerke

Public Finance Review, 2003, vol. 31, issue 2, 189-203

Abstract: In a pure tax evasion framework in which the monetary penalty is a function of the evaded tax, more progressive income taxes will reduce tax evasion if income has to be declared. However, if tax payments have to be declared, higher tax progressivity will have no effects. Thus, the relationship between tax evasion and tax progressivity depends on whether income or taxes have to be divulged to tax authorities. If the fine is a function of undeclared income, higher tax progressivity will always raise evasion.

Keywords: income declaration; fine function; tax declaration; tax evasion; tax progressivity (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:31:y:2003:i:2:p:189-203

DOI: 10.1177/1091142102250330

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