Intertemporal Resource Allocation and Income Tax Evasion

Authors

  • Osvaldo Schenone Universidad de San Andrés, Buenos Aires, Argentina image/svg+xml

Keywords:

tax evasion, income tax, intertemporal resource allocation, saving, capital accumulation, tax enforcement

Abstract

The discrimination against saving, in favour of present consumption, due to the income tax has been studied, at least, since the late thirties and was mentioned by John Stuart Mill more than a century ago. This paper is concerned with the effect of evading such a tax on the discrimination against savings and capital accumulation. In particular, we want to study a situation in which the probability of detecting an evader is an increasing function of his accumulated evasion in the past. This is consistent with the tax authorities being stricter in the control of tax payers with a relatively high net wealth, with respect to the incomes declared.

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References

Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3-4), 323–338. https://doi.org/10.1016/0047-2727(72)90010-2

Christiansen, V. (1980). Two comments on tax evasion. Journal of Public Economics, 13(3), 389–393. https://doi.org/10.1016/0047-2727(86)90012-5

Fisher, I. (1939). Double taxation of savings. American Economic Review, 29(1), 16–33.

Harberger, A. C. (1964). Taxation, resource allocation and welfare. In The role of direct and indirect taxes in the federal revenue system. Princeton University Press. https://doi.org/10.1515/9781400875931-003

Kolm, S. (1973). A note on optimal tax evasion. Journal of Public Economics, 2(3), 265–270.

Little, I. M. D. (1951). Direct versus indirect taxes. Economic Journal, 61(243), 577–584. https://doi.org/10.2307/2226489

Mill, J. S. (1965). Principles of political economy. Augustus M. Kelley.

Weiss, L. (1976). The desirability of cheating incentives and randomness in the optimal income tax. Journal of Political Economy, 84(6), 1343–1352. https://doi.org/10.1086/260519

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Published

1992-10-31

How to Cite

Schenone, O. (1992). Intertemporal Resource Allocation and Income Tax Evasion. Economic Analysis Review, 7(2), 69–77. Retrieved from https://www.rae-ear.org/index.php/rae/article/view/229

Issue

Vol. 7 No. 2 (1992)

Section

Articles

License

Copyright (c) 1992 Osvaldo Schenone

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This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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