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Mathematical models describing the effects of different tax evasion behaviors

Author

Listed:
  • M. L. Bertotti

    (Free University of Bozen-Bolzano)

  • G. Modanese

    (Free University of Bozen-Bolzano)

Abstract

Microscopic models describing a whole of economic interactions in a closed society are considered. The presence of a tax system combined with a redistribution process is taken into account, as well as the occurrence of tax evasion. In particular, the existence is postulated, in relation to the level of evasion, of different individual taxpayer behaviors. The effects of the mentioned different behaviors on shape and features of the emerging income distribution profile are investigated qualitatively and quantitatively. Numerical solutions show that the Gini inequality index of the total population increases when the evasion level is higher, but does not depend significantly on the evasion spread. For fixed spread, the relative difference between the average incomes of the worst evaders and honest taxpayers increases approximately as a quadratic function of the evasion level.

Suggested Citation

  • M. L. Bertotti & G. Modanese, 2018. "Mathematical models describing the effects of different tax evasion behaviors," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(2), pages 351-363, July.
    • Handle: RePEc:spr:jeicoo:v:13:y:2018:i:2:d:10.1007_s11403-016-0185-9
    DOI: 10.1007/s11403-016-0185-9
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    Cited by:

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    2. Sergey Dianov & Lyudmila Koroleva & Natalia Pokrovskaia & Natalia Victorova & Andrey Zaytsev, 2022. "The Influence of Taxation on Income Inequality: Analysis of the Practice in the EU Countries," Sustainability, MDPI, vol. 14(15), pages 1-19, July.
    3. Abuselidze, George, 2020. "Optimality of tax policy on the basis of comparative analysis of income taxation," MPRA Paper 104591, University Library of Munich, Germany.

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    More about this item

    Keywords

    Complex systems; Microscopic models; Tax evasion; Income distribution;
    All these keywords.

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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