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The intergenerational causal effect of tax evasion: Evidence from the commuter tax allowance in Austria

Wolfgang Frimmel (), Martin Halla () and Jörg Paetzold ()

Working Papers from Faculty of Economics and Statistics, University of Innsbruck

Abstract: Does tax evasion run in the family? To answer this question, we study the case of the commuter tax allowance in Austria. This allowance is designed as a step function of the distance between the residence and the workplace, creating sharp discontinuities at each bracket threshold. The distance to these brackets is a strong determinant of compliance since it corresponds to the probability of detection. The match of different administrative data sources allows us to observe actual compliance behavior at the individual level across two generations. To identify the intergenerational causal effect in tax evasion behavior, we use the paternal distance-to-bracket as an instrumental variable for paternal compliance. We find that paternal non-compliance increases children's non-compliance by about 20 percent.

Keywords: tax evasion; tax morale; intergenerational correlation; intergenerational causal effect (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eur, nep-iue, nep-pbe and nep-pub
Date: 2017-01
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Working Paper: The Intergenerational Causal Effect of Tax Evasion: Evidence from the Commuter Tax Allowance in Austria (2017) Downloads
Working Paper: The Intergenerational Causal Effect of Tax Evasion: Evidence from the Commuter Tax Allowance in Austria (2017) Downloads
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