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dc.contributor.authorSabirianova Peter, Klaraen_US
dc.date.accessioned2009-07-28en_US
dc.date.accessioned2010-07-07T11:54:42Z-
dc.date.available2010-07-07T11:54:42Z-
dc.date.issued2009en_US
dc.identifier.piurn:nbn:de:101:1-2009062240en_US
dc.identifier.urihttp://hdl.handle.net/10419/35637-
dc.description.abstractThis paper examines the effect of global transition to simpler, flatter income tax systems on the size of the shadow economy. By offering a new estimation framework, the paper revives the traditional electricity consumption approach to measuring the shadow economy. It overcomes the limitations of previous literature by using a new functional form, better quality data, a larger sample of 170 countries, a longer time span of 25 years, a panel framework, and instrumental variables. Our analysis provides strong evidence of a positive relationship between income tax rates and the size of the shadow economy. The effects of structural progressivity and complexity of national tax schedules are also found to be positive and statistically significant. These positive effects are reinforced when tax changes are accompanied by improving government services and strengthening the legal system. The flat tax is estimated to reduce the shadow economy in the short run, but this effect diminishes and disappears in the long run.en_US
dc.language.isoengen_US
dc.publisherIZA Bonnen_US
dc.relation.ispartofseriesIZA discussion papers 4223en_US
dc.subject.jelD73en_US
dc.subject.jelH1en_US
dc.subject.jelJ3en_US
dc.subject.jelJ4en_US
dc.subject.jelO1en_US
dc.subject.jelP2en_US
dc.subject.ddc330en_US
dc.subject.keywordShadow economyen_US
dc.subject.keywordtax evasionen_US
dc.subject.keywordpersonal income taxen_US
dc.subject.keywordcorporate income taxen_US
dc.subject.keywordflat taxen_US
dc.subject.keywordstructural progressivityen_US
dc.subject.keywordtax complexityen_US
dc.subject.keywordelectricity approachen_US
dc.subject.keywordinstitutionsen_US
dc.subject.stwSteuerreformen_US
dc.subject.stwFlat Taxen_US
dc.subject.stwWirkungsanalyseen_US
dc.subject.stwSchattenwirtschaften_US
dc.subject.stwWelten_US
dc.titleIncome tax flattening: does it help to reduce the shadow economy?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn605488037en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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