On the Relation between Tax Rates and Evasion in a Multi-period Economy

Please use this identifier to cite or link to this item: http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1904

Title:	On the Relation between Tax Rates and Evasion in a Multi-period Economy
Keywords:	Tax evasion Growth
Description:	We extend the basic tax evasion model to a multi-period economy exhibiting sustained growth. When individuals conceal part of their true income from the tax authority, they face the risk of being audited and hence of paying the corresponding fine. Both taxes and fines determine individual saving and the rate of capital accumulation. In this context we show that the sign of the relation between the level of the tax rate and the amount of evaded income is the same as that obtained in static setups. Moreover, high tax rates on income are typically associated with low growth rates as occurs in standard growth models that disregard the tax evasion phenomenon.
URI:	http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1904
Other Identifiers:	http://hdl.handle.net/10261/1904
Appears in Collections:	Digital Csic

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