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Tax incidence in the presence of tax evasion

Kopczuk, W., Marion, J., Muehlegger, E. and  Slemrod, J., (2013), “Tax incidence in the presence of tax evasion”, VoxEU, 30 September.

Tax evasion and noncompliance reduces government revenue and exacerbates the problem of increasing debt. Standard economic theory predicts that the identity of the tax remitter shouldn’t affect outcomes – but this ignores the possibility of evasion. This column provides evidence that in the presence of evasion, both the amount of revenue collected and the incidence of burden are sensitive to the identity of the remitter. These results should inform future tax reform.


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