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Title:Why pay taxes when no one else does? PDF Logo
Authors:Epstein, Gil S.
Gang, Ira N.
Issue Date:2009
Series/Report no.:Working Papers, Department of Economics, Rutgers, the State University of New Jersey 2009,02
Abstract:In this paper we try to understand the phenomena whereby a large proportion of the population evades tax payments. We present a model which incorporates elements from the theory of information cascades with the standard model of tax evasion and analyze the connection between the decision of a potential tax evader, the number of tax evaders and the number caught in previous periods. General conditions exist under which any expected utility maximizing potential tax evaders will decide to emulate other tax evaders.
Subjects:tax evasion
information cascades
uncertainty
JEL:H26
H31
D82
Document Type:Working Paper
Appears in Collections:Working Papers, Department of Economics, Rutgers University

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