Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/125316
Authors: 
Alm, James
Year of Publication: 
2014
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Year:] 2014 [Issue:] 91
Abstract: 
To determine the full effects of taxation on income distribution, policymakers need to consider the impacts of tax evasion. In the standard analysis of tax evasion, all the benefits are assumed to accrue to tax evaders. But tax evasion has other impacts that determine its true effects. As factors of production move from tax-compliant to tax-evading (informal) sectors, changes in relative prices and productivity reduce incentives for workers to enter the informal sector. At least some of the gains from evasion are thus shifted to the consumers of the output of tax evaders, through lower prices.
Subjects: 
tax evasion
tax incidence
general equilibrium
JEL: 
H26
C91
Persistent Identifier of the first edition: 
Document Type: 
Article

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