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CYCLICAL TAX ENFORCEMENT
Author(s) -
DuránCabré José M,
EstellerMoré Alejandro,
Salvadori Luca
Publication year - 2020
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12902
Subject(s) - economics , enforcement , tax revenue , argument (complex analysis) , ad valorem tax , revenue , tax reform , public economics , welfare , direct tax , indirect tax , monetary economics , market economy , finance , law , political science , biochemistry , chemistry
We wonder whether tax enforcement varies along the economic cycle and aim at answering that question from a positive perspective by means of survey data for the Spanish case (1994–2015). According to a fiscal capacity argument, tax enforcement might be stronger in times of crisis (counter‐cyclical), but if the tax administration prioritizes taxpayers' welfare over public revenue, enforcement might be slacker (procyclical). We find tax enforcement is not immune to the state of the economy. In particular, it presents a prevailing counter‐cyclical trend, but in presence of a severe economic crisis it turns out to be procyclical. ( JEL D78, H12, H26, H83)