Do Government-Spending-Induced Deficits Lower Tax Compliance?
Richard Cebula () and
Christopher Coombs ()
MPRA Paper from University Library of Munich, Germany
Abstract:
This study empirically investigates the deficit/tax-compliance hypothesis that higher federal budget deficits resulting from increased government spending lead to decreased federal personal income tax compliance in the U.S. The study period runs from 1960-2001 and adopts annual data. After allowing for a variety of factors that have been found previously to influence tax compliance/evasion, it is found that income tax evasion is an increasing function of budget deficits resulting from federal government spending increases.
Keywords: personal income tax compliance; tax evasion; budget deficits; IRS audit rates; IRS penalties; unemployment rate (search for similar items in EconPapers)
JEL-codes: H26 H31 H41 H62 (search for similar items in EconPapers)
Date: 2008-11-10, Revised 2009-04-18
References: View references in EconPapers View complete reference list from CitEc
Citations:
Published in Tax Notes 9.125(2009): pp. 1007-1012
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50121
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