Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223606
Authors: 
Alm, James
Kasper, Matthias
Year of Publication: 
2020
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Year:] 2020 [Issue:] 91v2
Abstract: 
How does tax evasion affect the distribution of income? In the standard analysis of tax evasion, all the benefits are assumed to accrue to tax evaders. However, tax evasion has other impacts that determine its true effects. As factors of production move from tax-compliant to tax-evading (informal) sectors, these market adjustments generate changes in relative prices of products and factors, thereby affecting what consumers pay and what workers earn. As a result, at least some of the gains from evasion are shifted to consumers of goods produced by tax evaders, and at least some of the returns to tax evaders are competed away via lower wages.
Subjects: 
tax evasion
tax incidence
general equilibrium
JEL: 
H26
C91
Persistent Identifier of the first edition: 
Document Type: 
Article

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