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Sustainable Consumer Tax Evasion Theory under Information Inattention

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  • Bodo Herzog

    (ESB Business School, 72762 Reutlingen, Germany
    Reutlingen Research Institute (RRI), 72762 Reutlingen, Germany
    Institute of Finance and Economics (IFE), Reutlingen University, 72762 Reutlingen, Germany)

Abstract

This article studies the renewed interest surrounding sustainable public finance and the topic of tax evasion as well as the new theory of information inattention. Extending a model of tax evasion with the notion of inattention reveals novel findings about policy instruments that can be used to mitigate tax evasion. We show that the attention parameters regarding tax rates, financial penalty schemes and income levels are as important as the level of the detection probability and the financial penalty incurred. Thus, our theory recommends the enhancement of sustainability in public policy, particularly in tax policy. Consequently, the paper contributes both to the academic and public policy debate.

Suggested Citation

  • Bodo Herzog, 2021. "Sustainable Consumer Tax Evasion Theory under Information Inattention," Sustainability, MDPI, vol. 13(2), pages 1-13, January.
  • Handle: RePEc:gam:jsusta:v:13:y:2021:i:2:p:562-:d:477266
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    References listed on IDEAS

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    1. Petre Valeriu Ninulescu, 2022. "Tax Evasion And Tax Havens - A Critical Theoretical Survey," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 261-264, February.

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