Tax evasion: A model

Srinivasan, T. N.

doi:10.1016/0047-2727(73)90024-8

Cited by 368 publications

(203 citation statements)

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“…A useful model of taxpayers' evasion decision is that developed by Allingham and Sandmo ([1972] 1991) and Srinivasan (1973), and revised by Yitzhaki (1974). Evasion is viewed as a portfolio allocation problem: the taxpayer must decide what portion of his income y (postulated as exogenous) to invest in the risky activity labeled 'tax evasion'.…”

Section: Allingham and Sandmomentioning

confidence: 99%

Tax Evasion and Tax Compliance

Franzoni

1998

SSRN Journal

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Section: Allingham and Sandmomentioning

confidence: 99%

Tax Evasion and Tax Compliance

Franzoni

1998

SSRN Journal

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“…A related article by Srinivasan (1973) addressed many of the same issues but assumed risk neutrality rather than risk aversion on the part of the taxpayer.…”

mentioning

confidence: 99%

An evasive topic: theorizing about the hidden economy

Sandmo

2011

Int Tax Public Finance

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This paper reviews some central issues that arise in theorizing about tax evasion decisions and the hidden economy. It starts from the Allingham-Sandmo (1972) modelling of the tax evasion decision as a choice under uncertainty based on expected utility maximization and risk aversion. It goes on to discuss alternative specifications of the taxpayer's preferences with particular regard to the explanation of the extensive margin, i.e. the decision on whether or not to engage in tax evasion. It extends the model to the case of variable labour supply with work in both official and black labour markets. It then considers the application of the theory to taxes on wealth and income from capital, indirect tax evasion and smuggling. It also includes a consideration of general equilibrium effects and of the problems that evasion causes for the theory of optimal income and commodity taxes. It concludes with a brief discussion of the implications of tax evasion for economic policy in the welfare state.

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“…3 The early theoretical analyses of tax evasion are provided by Allingham and Sandmo (1972) and Srinivasan (1973), where under-reporting of income by an individual is modeled as a decision made under uncertainty. Subsequent papers have enhanced the basic model of individual behavior by, for example, incorporating endogenous labour supply decisions.…”

Section: This In Turn Raises the Value Of Employment Relative To Unemmentioning

confidence: 99%

Under‐reporting of Income and Labor Market Performance

Kolm

Nielsen

2008

J Public Economic Theory

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To examine the e¤ects on labor market performance of government tax and enforcement policies, this paper develops an equilibrium model featuring tax evasion, matching frictions, and worker-…rm wage bargains. In the wage bargains, workers and …rms can agree on the amount of remuneration that should not be reported to the tax authorities. We …nd that increased taxation actually reduces unemployment, whereas more zealous enforcement has the opposite e¤ect.JEL codes: J64, J41, H26 Keywords: Unemployment, matching, wage bargaining, tax evasion We want to thank two anonymous referees for very helpful comments and suggestions.

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Tax evasion: A model

Cited by 368 publications

References 0 publications

Tax Evasion and Tax Compliance

Tax Evasion and Tax Compliance

An evasive topic: theorizing about the hidden economy

Under‐reporting of Income and Labor Market Performance

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