IDEAS home Printed from https://ideas.repec.org/p/wop/eacaec/9724.html
   My bibliography  Save this paper

Tax Gaps and Tax Rates: New Evidence from the Taxpayer Compliance Measurement Program

Author

Listed:
  • John A. Bishop
  • K. Victor Chow
  • John P. Formby
  • C. C. Ho

Abstract

The reductions in the top marginal rates during the 1980's have renewed interest in the relationship between the underreporting of income and the marginal tax rates. Unfortunately, theory provides no clear answer to question of whether lower marginal tax rates reduce or increase the size of the underground economy as the substitution effect encourages evasion while the income effect discourages it. We explicitly recognize that income has both a direct effect on the size of under-reporting and an indirect effect through a change in the marginal tax rate. We present a method that separates the scale impact of income on under-reporting from the indirect effect income plays in the taxpayer response to changes in the marginal tax rate. We find a positive relationship between marginal tax rates and tax evasion.

Suggested Citation

  • John A. Bishop & K. Victor Chow & John P. Formby & C. C. Ho, "undated". "Tax Gaps and Tax Rates: New Evidence from the Taxpayer Compliance Measurement Program," Working Papers 9724, East Carolina University, Department of Economics.
    • Handle: RePEc:wop:eacaec:9724
    Note: For a copy of the paper, e-mail: bishopj@mail.ecu.edu
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thor O. Thoresen, 2004. "Reduced Tax Progressivity in Norway in the Nineties: The Effect from Tax Changes," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(4), pages 487-506, August.
    2. Peter Lambert & Thor Thoresen, 2009. "Base independence in the analysis of tax policy effects: with an application to Norway 1992–2004," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(2), pages 219-252, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:eacaec:9724. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/deecuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.