Tax Amnesties and the Insurance Effect: An Experimental Study

Konferenzbeitrag

Many countries grant exemption from legal prosecution under certain conditions, allowing for voluntary disclosures regarding tax evasion. Empirically, tax amnesties appear most successful when accompanied by an increase in enforcement efforts because they help evaders to adjust to the new circumstances. Time-limited amnesties are often repeated or in some countries even permanent. Anticipated tax amnesties can, however, serve as an insurance against a rise in the detection probability, potentially leading to less and not more tax compliance. We test the relevance of this insurance effect in an experimental tax game and disentangle it from an effect on tax morale, i.e., non-pecuniary motives to comply. We ftnd that the former effect indeed decreases overall tax compliance by about 7-10 percent, showing its relevance for the design of tax policies. A high predictability of amnesties may work to their detriment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2015: Ökonomische Entwicklung - Theorie und Politik - Session: Tax experiments ; No. E15-V1

Classification and Topics

• Classification: Wirtschaft ; Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes ; Tax Evasion and Avoidance ; Design of Experiments: Laboratory, Individual
• Subject: tax compliance ; tax amnesty ; lab experiment ; social norms

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Koch, Christian ; Müller, Cornelius
• Event: Veröffentlichung
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/251220
• Last update: 10.03.2025, 11:43 AM CET