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Stricter enforcement may increase tax evasion
- Source :
-
European Journal of Political Economy . Sep2004, Vol. 20 Issue 3, p725-737. 13p. - Publication Year :
- 2004
-
Abstract
- This paper shows that stricter enforcement may increase tax evasion. Individuals vote on a linear income tax, which is used to finance lump sum transfers. Individuals may evade taxes, but they have to pay fines when caught. Stricter enforcement may make redistributive taxation more attractive to the decisive voter. The tax rate and transfer may rise, which in turn may increase tax evasion. The paper also discusses the interaction between voting on taxes and the choice of audit rate by a budget-maximizing bureaucrat. [Copyright &y& Elsevier]
- Subjects :
- *TAX laws
*WAGE taxation
*FINANCE
*INCOME
Subjects
Details
- Language :
- English
- ISSN :
- 01762680
- Volume :
- 20
- Issue :
- 3
- Database :
- Academic Search Index
- Journal :
- European Journal of Political Economy
- Publication Type :
- Academic Journal
- Accession number :
- 14187803
- Full Text :
- https://doi.org/10.1016/j.ejpoleco.2003.09.001