A Dynamic Approach to Tax Evasion

Basil Dalamagas
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Basil Dalamagas: Department of Economics, University of Athens, Athens, Greece, dalamaga@econ.uoa.gr

Public Finance Review, 2011, vol. 39, issue 2, 309-326

Abstract: Standard models of tax evasion use a static decision-under-uncertainty setting to determine how an individual’s evasion decision is affected by the fiscal instruments. Most of these models fail to create a framework, within which unique relationships between tax evasion and its main determinants (especially tax rates and actual income) could be derived. The purpose of this paper is to establish a new pattern of unambiguous relationships in the evasion theory, by shifting the emphasis from the comparative static analysis of previous studies to a comparative-dynamics framework in the context of a neoclassical growth model, in which time and the average burden from all kinds of taxes also play an important role in affecting the taxpayer’s decision making process.

Keywords: average tax rate; detection probability; fines; tax compliance; tax evasion; total tax burden; hours of work (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:39:y:2011:i:2:p:309-326

DOI: 10.1177/1091142110386213

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