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Evasion Effects of Changing the Tax Mix*
Author(s) -
KESSELMAN JONATHAN R.
Publication year - 1993
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1993.tb01809.x
Subject(s) - economics , dividend , evasion (ethics) , tax deferral , distribution (mathematics) , indirect tax , consumption (sociology) , tax evasion , income distribution , general equilibrium theory , public economics , microeconomics , tax reform , monetary economics , state income tax , gross income , inequality , mathematical analysis , social science , immune system , mathematics , finance , sociology , immunology , biology
This study assesses claims that shifting toward greater indirect taxes will reduce evasion, thereby improving the distribution of real net incomes and generating a ‘fiscal dividend’. Practical considerations suggest that industry sectors which evade income taxes will also be strongly inclined to evade indirect taxes on their output. A general equilibrium analysis finds that changing the tax mix will have little or none of the claimed anti–evasion or distributional effects. Increased indirect taxes on evaders' consumption purchases will be shifted onto suppliers in the compliant sector. Evaders will end up evading less income taxes but evading more indirect taxes