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Who Benefits from Tax Evasion?

Author

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  • James Alm

    (Department of Economics, Tulane University, 6823 St. Charles Avenue, 208 Tilton Hall, New Orleans, LA 70118, U.S.A.)

  • Keith Finlay

    (Department of Economics, Tulane University, 6823 St. Charles Avenue, 208 Tilton Hall, New Orleans, LA 70118, U.S.A.)

Abstract

In this paper, we examine the distributional effects of tax evasion, using results from theoretical, experimental, empirical, and especially the general equilibrium literatures on tax evasion. Much – if not all – of this evidence concludes that the main beneficiaries of successful tax evasion are the tax evaders themselves, with distributional effects that largely favor higher income individuals. However, when general equilibrium adjustments in commodity and factor prices are considered, the distributional effects become considerably more complicated. The work on tax compliance is also put in the broader context of the distributional effects of other types of criminal activities, where similar forces seem to be at work. We conclude with some suggestions for future research.

Suggested Citation

  • James Alm & Keith Finlay, 2013. "Who Benefits from Tax Evasion?," Economic Analysis and Policy, Elsevier, vol. 43(2), pages 139-154, September.
    • Handle: RePEc:eee:ecanpo:v:43:y:2013:i:2:p:139-154
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    9. Alm, James & Blackwell, Calvin & McKee, Michael, 2004. "Audit Selection and Firm Compliance With a Broad-Based Sales Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 57(2), pages 209-227, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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