The excess burden of tax evasion - An experimental detection-concealment contest

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dc.contributor.authorBayer, R.
dc.contributor.authorSutter, M.
dc.date.issued2009
dc.description.abstractTax evasion may cause social welfare losses due to the incentives of taxpayers to invest in the concealment and of tax authorities to invest in the detection of tax evasion. Reducing the investment of both parties at the same time would then lead to a Pareto improvement. Given that concealment and detection costs are hardly measurable in reality, we show in a controlled laboratory experiment that the welfare losses from a concealment-detection contest depend positively on the prevailing tax rate, but not on the penalty which is imposed in case of detected tax evasion. Hence, policy makers who are concerned about socially inefficient concealment and enforcement costs should focus on tax rates rather than penalty rates. © 2008 Elsevier B.V. All rights reserved.
dc.description.statementofresponsibilityRalph-C. Bayer and Matthias Sutter
dc.identifier.citationEuropean Economic Review, 2009; 53(5):527-543
dc.identifier.doi10.1016/j.euroecorev.2008.09.004
dc.identifier.issn0014-2921
dc.identifier.orcidBayer, R. [0000-0001-8066-2685]
dc.identifier.urihttp://hdl.handle.net/2440/52334
dc.language.isoen
dc.publisherElsevier Science BV
dc.source.urihttps://doi.org/10.1016/j.euroecorev.2008.09.004
dc.subjectTax evasion
dc.subjectConcealment
dc.subjectDetection
dc.subjectTax rates
dc.subjectPenalty rates
dc.subjectExperiment
dc.titleThe excess burden of tax evasion - An experimental detection-concealment contest
dc.typeJournal article
pubs.publication-statusPublished

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