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Tax Avoidance in Buenos Aires: The Case of Ingresos Brutos

Author

Listed:
  • Carolina Ines Pan

    (Center for International Development at Harvard University)

Abstract

This study presents evidence of tax avoidance in Buenos Aires, Argentina. I exploit a break in the tax scheme of the most controversial tax, Ingresos Brutos (gross income), between the city and the greater area, which are otherwise identical law and regulation-wise for the studied population. When possible, workers would rather travel longer distances to their jobs than face the tax burden. Given that this type of avoidance is costly, results suggest that Ingresos Brutos might be acting as a binding constraint to growth for businesses.

Suggested Citation

  • Carolina Ines Pan, 2019. "Tax Avoidance in Buenos Aires: The Case of Ingresos Brutos," Growth Lab Working Papers 145, Harvard's Growth Lab.
    • Handle: RePEc:glh:wpfacu:145
    as

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    File URL: https://growthlab.cid.harvard.edu/files/growthlab/files/2019-09-cid-fellows-wp-117-tax-avoidance-buenos-aires.pdf
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    References listed on IDEAS

    as
    1. Desai, Mihir A. & Dharmapala, Dhammika, 2006. "Corporate tax avoidance and high-powered incentives," Journal of Financial Economics, Elsevier, vol. 79(1), pages 145-179, January.
    2. Alberto Porto & Marcelo Garriga & Walter Rosales, 2017. "El Impuesto a los Ingresos Brutos y Alternativas de Reforma," IIE, Working Papers 112, IIE, Universidad Nacional de La Plata.
    3. DeCicca, Philip & Kenkel, Donald & Liu, Feng, 2013. "Excise tax avoidance: The case of state cigarette taxes," Journal of Health Economics, Elsevier, vol. 32(6), pages 1130-1141.
    4. Hongbin Cai & Qiao Liu, 2009. "Competition and Corporate Tax Avoidance: Evidence from Chinese Industrial Firms," Economic Journal, Royal Economic Society, vol. 119(537), pages 764-795, April.
    5. John R. Graham, 2003. "Taxes and Corporate Finance: A Review," The Review of Financial Studies, Society for Financial Studies, vol. 16(4), pages 1075-1129.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Taxes; Tax Avoidance; Gross Income; Binding Constraints;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • K2 - Law and Economics - - Regulation and Business Law

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