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Income Tax Evasion Revisited: The Impact of Interest Rate Yields on Tax‐Free Municipal Bonds
Author(s) -
Cebula Richard J.
Publication year - 2004
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.2004.tb00647.x
Subject(s) - taxable income , economics , treasury , yield (engineering) , state income tax , monetary economics , tax rate , bond , indirect tax , ad valorem tax , tax evasion , value added tax , tax reform , income tax , gross income , double taxation , public economics , finance , accounting , law , materials science , political science , metallurgy
This study empirically investigates a hypothesis that the degree of aggregate federal personal income tax evasion may be influenced by the interest rate yield on high‐grade municipal bonds. After allowing for the impacts of a variety of factors that typically have been inferred to influence income tax evasion, it is found that the higher the tax‐free interest rate yield on high‐grade municipal bonds relative to the taxable yield on 10‐year Treasury notes, the lower the aggregate degree of federal personal income tax evasion.