Tax avoidance, endogenous social norms, and the comparison income effect

Arbeitspapier

We present a model of income tax avoidance with heterogeneous agents, assuming the presence of a comparison income effect and of a psychic cost (disutility) of tax dodging. We analyse the policy preferences of the agents, and identify a median-voter political equilibrium. Paralleling previous results in the optimal taxation literature, we show that the comparison income effect calls for a high degree of progressivity of the income tax; additionally, we find that this tendence is strengthened by the psychic cost of avoidance. We then model the endogenous formation of the stigma attached to the act of avoidance as a conformism game. We argue that such stigma is motivated by the desire to make redistribution more effective, and that it is enhanced by the income comparison effect.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 1758

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ; Tax Evasion and Avoidance ; Fiscal Policies and Behavior of Economic Agents: Household
• Thema: Steuervermeidung ; Steuersystem ; Einkommensverteilung ; Wirtschaftsmodell

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Balestrino, Alessandro
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2006

Weitere Informationen

• Handle: http://hdl.handle.net/10419/25803
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ