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Intra-household Tax Avoidance: An Application to Swedish Household Data

Author

Listed:
  • Aronsson, Thomas

    (Department of Economics, Umeå University)

  • Daunfeldt, Sven-Olov

    (Department of Economics, Umeå University)

  • Wikström, Magnus

    (Department of Economics, Umeå University)

Abstract

This paper analyzes whether households use house interest deductions to minimize family tax payment. By applying a household model in which tax deductions are associated with a cost, we relate the likelihood of minimizing the tax payment to variables associated with the budget constraint and other household characteristics. The results show that 88 percent of the households follow an optimal (arbitrage free) avoidance strategy, and the likelihood of minimizing taxes is influenced by income, age and house ownership experience.

Suggested Citation

  • Aronsson, Thomas & Daunfeldt, Sven-Olov & Wikström, Magnus, 2001. "Intra-household Tax Avoidance: An Application to Swedish Household Data," Umeå Economic Studies 572, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0572
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    References listed on IDEAS

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    1. Jonas Agell & Peter Englund & Jan Södersten, 1998. "Incentives and Redistribution in the Welfare State," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-333-99485-6, December.
    2. Slemrod, Joel & Yitzhaki, Shlomo, 2002. "Tax avoidance, evasion, and administration," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470, Elsevier.
    3. Klevmarken, Anders, 1982. "Household Market and Nonmarket Activities (HUS) – A Pilot Study," Working Paper Series 77, Research Institute of Industrial Economics.
    4. Stephens, Melvin Jr & Ward-Batts, Jennifer, 2004. "The impact of separate taxation on the intra-household allocation of assets: evidence from the UK," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1989-2007, August.
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    Cited by:

    1. Graciela Chichilnisky, 2008. "The Gender Gap," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 828-844, November.

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    More about this item

    Keywords

    Income taxation; Tax avoidance; Housing deductions;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

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