The Aggregate Consequences of Tax Evasion

Loading...
Thumbnail Image
Date
2018
Editors
Contact
Journal ISSN
Electronic ISSN
ISBN
Bibliographical data
Publisher
Series
Working Paper Series / Department of Economics; 2018-06
DOI (citable link)
ArXiv-ID
International patent number
Link to the license
EU project number
Project
Open Access publication
Restricted until
Title in another language
Research Projects
Organizational Units
Journal Issue
Publication type
Working Paper/Technical Report
Publication status
Published
Published in
Abstract
There is a sizable overall tax gap in the U.S., albeit tax non-compliance differs sharply across income types. While only small percentages of wages and salaries are underreported, the estimated misreporting rate of self-employment business income is substantial. This paper studies how tax evasion in the self-employment sector affects aggregate outcomes and welfare. We develop a dynamic general equilibrium model with incomplete markets in which heterogeneous agents choose between being a worker or self-employed. Self-employed agents may hide a share of their business income but face the risk of being detected by the tax authority. Our model replicates important quantitative features of the U.S. economy in terms of income, wealth, self-employment, and tax evasion. Our quantitative ndings suggest that tax evasion leads to a larger self-employment sector but it depresses the average size and productivity of self-employed businesses. Tax evasion generates positive aggregate welfare effects because it acts as a subsidy for the self-employed. Workers, however, suffer from substantial welfare losses.
Summary in another language
Subject (DDC)
330 Economics
Keywords
Tax evasion, Self-employment, Wealth inequality, Tax policy
Conference
Review
undefined / . - undefined, undefined. - (undefined; undefined)
Cite This
ISO 690DI NOLA, Alessandro, Georgi KOCHARKOV, Almuth SCHOLL, Anna-Mariia TKHIR, 2018. The Aggregate Consequences of Tax Evasion
BibTex
@techreport{DiNola2018Aggre-47867,
  year={2018},
  series={Working Paper Series / Department of Economics},
  title={The Aggregate Consequences of Tax Evasion},
  number={2018-06},
  url={https://ideas.repec.org/p/knz/dpteco/1806.html},
  author={Di Nola, Alessandro and Kocharkov, Georgi and Scholl, Almuth and Tkhir, Anna-Mariia}
}
RDF
<rdf:RDF
    xmlns:dcterms="http://purl.org/dc/terms/"
    xmlns:dc="http://purl.org/dc/elements/1.1/"
    xmlns:rdf="http://www.w3.org/1999/02/22-rdf-syntax-ns#"
    xmlns:bibo="http://purl.org/ontology/bibo/"
    xmlns:dspace="http://digital-repositories.org/ontologies/dspace/0.1.0#"
    xmlns:foaf="http://xmlns.com/foaf/0.1/"
    xmlns:void="http://rdfs.org/ns/void#"
    xmlns:xsd="http://www.w3.org/2001/XMLSchema#" > 
  <rdf:Description rdf:about="https://kops.uni-konstanz.de/server/rdf/resource/123456789/47867">
    <dcterms:issued>2018</dcterms:issued>
    <dspace:isPartOfCollection rdf:resource="https://kops.uni-konstanz.de/server/rdf/resource/123456789/46"/>
    <dc:rights>terms-of-use</dc:rights>
    <dspace:hasBitstream rdf:resource="https://kops.uni-konstanz.de/bitstream/123456789/47867/1/DiNola_2-lseqntr4oekc6.pdf"/>
    <dc:creator>Di Nola, Alessandro</dc:creator>
    <dc:date rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2019-12-06T12:34:51Z</dc:date>
    <dc:language>eng</dc:language>
    <dc:contributor>Di Nola, Alessandro</dc:contributor>
    <bibo:uri rdf:resource="https://kops.uni-konstanz.de/handle/123456789/47867"/>
    <dc:creator>Kocharkov, Georgi</dc:creator>
    <dc:contributor>Tkhir, Anna-Mariia</dc:contributor>
    <dcterms:hasPart rdf:resource="https://kops.uni-konstanz.de/bitstream/123456789/47867/1/DiNola_2-lseqntr4oekc6.pdf"/>
    <foaf:homepage rdf:resource="http://localhost:8080/"/>
    <dc:contributor>Scholl, Almuth</dc:contributor>
    <dcterms:available rdf:datatype="http://www.w3.org/2001/XMLSchema#dateTime">2019-12-06T12:34:51Z</dcterms:available>
    <dc:creator>Tkhir, Anna-Mariia</dc:creator>
    <dc:creator>Scholl, Almuth</dc:creator>
    <dcterms:title>The Aggregate Consequences of Tax Evasion</dcterms:title>
    <dcterms:rights rdf:resource="https://rightsstatements.org/page/InC/1.0/"/>
    <dcterms:isPartOf rdf:resource="https://kops.uni-konstanz.de/server/rdf/resource/123456789/46"/>
    <void:sparqlEndpoint rdf:resource="http://localhost/fuseki/dspace/sparql"/>
    <dc:contributor>Kocharkov, Georgi</dc:contributor>
    <dcterms:abstract xml:lang="eng">There is a sizable overall tax gap in the U.S., albeit tax non-compliance differs sharply across income types. While only small percentages of wages and salaries are underreported, the estimated misreporting rate of self-employment business income is substantial. This paper studies how tax evasion in the self-employment sector affects aggregate outcomes and welfare. We develop a dynamic general equilibrium model with incomplete markets in which heterogeneous agents choose between being a worker or self-employed. Self-employed agents may hide a share of their business income but face the risk of being detected by the tax authority. Our model replicates important quantitative features of the U.S. economy in terms of income, wealth, self-employment, and tax evasion. Our quantitative ndings suggest that tax evasion leads to a larger self-employment sector but it depresses the average size and productivity of self-employed businesses. Tax evasion generates positive aggregate welfare effects because it acts as a subsidy for the self-employed. Workers, however, suffer from substantial welfare losses.</dcterms:abstract>
  </rdf:Description>
</rdf:RDF>
Internal note
xmlui.Submission.submit.DescribeStep.inputForms.label.kops_note_fromSubmitter
Contact
Test date of URL
2019-12-06
Examination date of dissertation
Method of financing
Comment on publication
Alliance license
Corresponding Authors der Uni Konstanz vorhanden
International Co-Authors
Bibliography of Konstanz
Yes
Refereed