We use Nielsen Homescan data to examine who bears the economic burden of cigarette taxes. We find cigarette taxes are less than fully passed through to consumer prices, suggesting consumers and ...producers split the excess burden of these taxes. Using information on consumer location, we show the availability of lower-tax goods across state borders creates significant differences in the pass-through rate. Tax avoidance opportunities also have a sizable effect on purchasing behavior by altering consumer search, prices paid and quantities purchased. Finally, we demonstrate that the incidence of cigarette taxes and the border effect varies by household income and education.
• Moral age effects may hamper income tax evasion. • Public goods provision may lead to more income tax evasion. • Pareto-optimal provision of pure public goods emerges definitely in some periods. • ...Back auditing seems to influence tax non-compliance particularly strongly. • Social norm updating dominates tax evasion dynamics in any scenario.
Income tax evasion dynamics and social interactions are analyzed with an agent-based model in heterogeneous populations. One novelty is the combined analysis of back auditing and ageing, which allows for incorporating psychological findings with respect to social norm updating over a taxpayer’s life cycle. Another novelty concerns individual’s social behavior regarding a Pareto-optimal provision of public goods. Simulation results support the counterintuitive conclusion drawn elsewhere in the literature that income tax compliance may decrease with raising marginal per capita returns (MPCRs). Yet, back auditing seems to have by far the strongest impact on the dynamics of fiscal fraud and also can help to curb the extent of tax evasion (ETE).
Fifty-six percent of the US taxpaying population uses a paid tax preparer, but the effect of these tax preparation services on tax compliance is not well understood. Although governments conceal the ...algorithms they use to determine which taxpayers to audit, tax preparation firms with large client bases may be able to infer these algorithms and therefore offer strategic advice to taxpayers. This paper formalizes this role, using a simple asymmetric information model where agents can purchase information about the government’s enforcement rules. In a competitive market for tax preparation services, demand for tax preparers is selective and increases in taxpayer income. Moreover, the presence of tax preparers always reduces compliance when tax preparers have perfect information. Perhaps surprisingly, if the demand for strategic advice is high enough, the government can mitigate evasion by revealing full information about its audit rule. Alternatively, when the tax preparers have imperfect information about the audit rule, if the top income within an audit class is low enough, the government can utilize tax preparer firms to increase compliance by influencing the audit information available to these firms.
Purpose
This paper aims to explore the relationship among personality traits, tax morale and tax evasion intention of students. Using the five-factor model of personality ratings, this study ...hypothesizes that agreeableness, openness to experience, conscientiousness, extraversion and neuroticism are good predictors of both tax morale and tax evasion intentions of individuals. Further, this paper argues that tax morale correlates negatively with tax evasion intention.
Design/methodology/approach
A survey method was adopted and questionnaires were developed to elicit responses for the study. The study hypotheses were tested structurally using the partial least square-structural equation modelling technique.
Findings
The results of the study demonstrate the existence of a positive and statistically significant relationship between three dimensions of the personality traits (agreeableness, conscientiousness and openness to experience) and tax morale. Consistent with the expectation, the study also finds tax morale to be significant and negatively associated with tax evasion intention.
Research limitations/implications
This study concludes from the findings that improving the tax morale of individuals could be an important way by which tax authorities can improve voluntary tax compliance and reduce the incidence of tax evasion by individuals.
Originality/value
The study uses all the dimensions of the five-factor model to examine the tax evasion intention of individuals. It also contributes to the theoretical literature by highlighting the mediating role of tax morale in the relationship between personality traits and tax evasion intention from an African perspective.
Do firms replicate the tax avoidance schemes of their peers? The present paper provides evidence along these lines. An event study shows that a US-listed enterprise is more likely to enter a specific ...tax haven if another US-listed enterprise operating in the same sector already owns subsidiaries in that tax haven. The inclusion of three-way fixed effects, the absence of pre-trends, and several robustness checks consolidate the results. Moreover, profit shifting spillovers vary over time, across sectors, and by tax haven. The findings suggest that aggressive tax planning strategies spread within industries and carry policy implications.
For the purposes of assessing tax, section 170 of the Income Tax Assessment Act 1936 (Cth) permits the Commissioner to determine that the taxpayer has committed fraud or evasion. The taxpayer then ...bears the onus of showing that they have not. There is no requirement that the Commissioner show that such determination is correct, nor to support it with evidence. The Commissioner may, if they wish, do nothing more than put the taxpayer to proof by tendering their assessment as evidence. This article sets out in detail how the reversal of the onus of proof in cases arising from the Commissioner’s determination of fraud or evasion offends the principle of procedural fairness, as well as the principles of certainty and prospectivity. This paper also extends that analysis to disputes arising out of the commissioner’s determination of tax avoidance under Part IVA of the Income Tax Assessment Act 1936 (Cth). This paper further considers whether general administrative law principles, in particular the Briginshaw Principle, may obviate some of the concerns regarding the reversal of the onus of proof. It is contended that the reversal of the onus of proof in cases arising out of the Commissioner’s determination of fraud or evasion under section 170 and tax avoidance under Part IVA significantly offend fundamental tenets of the rule of law, namely, the principles of procedural fairness, certainty and prospectivity. It is further contended that requiring the Commissioner to adduce evidence to support the opinion or allowing the Commissioner’s determination to be judicially examined would obviate the offence to the rule of law.
The problem of tax evasion and tax avoidance is one of the most important issues which Greece has to face. In Greece, research has provided evidence that tax evasion is higher than other countries ...and this fact burdens the economic situation of the country. Overcrowding in a reluctant economy has many adverse effects and is a brake on sustainable development. High taxes are incentive for tax evasion, causing the state to record revenue losses. This in turn leads to new tax increases, further encouraging tax evasion. The subject of this paper is the over-taxation and its relation to the corruption phenomenon that characterizes the country of Greece. For the needs of this paper, an experimental survey was distributed to commercial enterprises in a prefecture of Peloponnese of Greece. The results of the survey showed that overpopulation and corruption co-exist and are symptoms of a society dominated by a lack of confidence in the state. Both overemphasis and corruption are political and economic problems and well-designed measures to modernize the political system and contribute to their effective treatment.
The equity/efficiency tradeoff is a fairly extensive topic in economic literature. A large body of work has concentrated efforts on a variety of relevant issues, such as the determining factors of ...equity and efficiency and the potentially damaging economic consequences in terms of government failure in choosing the proper mix of fiscal objectives. However, no attempt has been made so far to use adjustments in tax rates in order to define an optimal equity/efficiency level that could be combined with the government's aim of playing a more prominent role in promoting the optimal fiscal policy objectives. In the present study, we find that changes in direct/indirect tax rates are capable of affecting not only the optimal level of evasion but also the optimal policy goals of equity/efficiency. To this end, a theoretical optimization model is constructed, the first-order conditions are properly manipulated and simulations are conducted to determine optimal evasionand optimal allocation of resources to the fiscal objectives of equity and/or efficiency. The model is empirically tested by employing data from 35 countries over the period 2007-2015.
Purpose: This research is aimed to analyze the cheating behavior done by the non-compliance tax payers in Indonesia. Methodology: The data used in this research was primary data from questionnaire ...which was directly obtained from the object of civil servant working in Batang Regency, Central Java. PLS-SEM was used to test and analyze the data. Findings: The finding showed that there was a negative and significant influence of religiosity to the intention of a civil servant to do tax evasion and there was a positive and significant influence toward people’s intention to do tax evasion. Originality: This paper contributes to the literature by testing the Theory of Planned Behavior to examine noncompliance tax payers
PDF
