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Who Benefits from Tax Evasion?

Author

Listed:
  • James Alm

    (Department of Economics, Tulane University)

  • Keith Finlay

    (Department of Economics, Tulane University)

Abstract

In this paper, we examine the distributional effects of tax evasion, using results from theoretical, experimental, empirical, and especially the general equilibrium literatures on tax evasion. Much, if not all, of this evidence concludes that the main beneficiaries of successful tax evasion are the tax evaders themselves, with distributional effects that largely favor higher income individuals. However, when general equilibrium adjustments in commodity and factor prices are considered, the distributional effects become considerably more complicated. The work on tax compliance is also put in the broader context of the distributional effects of other types of criminal activities, where similar forces seem to be at work. We conclude with some suggestions for future research.

Suggested Citation

  • James Alm & Keith Finlay, 2012. "Who Benefits from Tax Evasion?," Working Papers 1214, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:1214
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    References listed on IDEAS

    as
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    9. Rafael Di Tella & Sebastian Edwards & Ernesto Schargrodsky, 2010. "The Economics of Crime: Lessons For and From Latin America," NBER Books, National Bureau of Economic Research, Inc, number dite09-1, February.
    10. Alm, James & Jackson, Betty R. & McKee, Michael, 2009. "Getting the word out: Enforcement information dissemination and compliance behavior," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 392-402, April.
    11. James Alm, 2012. "Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 54-77, February.
    12. Kehoe, Timothy J. & Serra-Puche, Jaime, 1983. "A computational general equilibrium model with endogenous unemployment : An analysis of the 1980 fiscal reform in Mexico," Journal of Public Economics, Elsevier, vol. 22(1), pages 1-26, October.
    13. Alm, James & Jacobson, Sarah, 2007. "Using Laboratory Experimentsin Public Economics," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(1), pages 129-152, March.
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    18. Rafael Di Tella & Sebastian Galiani & Ernesto Schargrodsky, 2010. "Crime Distribution and Victim Behavior during a Crime Wave," NBER Chapters, in: The Economics of Crime: Lessons For and From Latin America, pages 175-204, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tax evasion; general equilibrium;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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