Tax Avoidance and Excess Burden of Income Tax
0
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
Our main objective in this paper is to show that income taxation creates an extra burden or distortion when tax avoidance is available. We present a labor supply model with endogenous asset portfolio choice and show that tax avoidance by trading assets impacts labor supply response and total excess burden of income tax. In our model individuals are allowed to change their asset portfolio to reduce their tax liabilities, and this distortion is the main source of the higher efficiency cost in our model. Furthermore, we show that ignoring the avoidance responses leads to biased results when estimating the labor supply distortion and welfare cost of a tax reform. Progressivity of a given tax system is predicted to be less than the formal tax code due to tax avoidance through tax arbitrage.
Abstract
Our main objective in this paper is to show that income taxation creates an extra burden or distortion when tax avoidance is available. We present a labor supply model with endogenous asset portfolio choice and show that tax avoidance by trading assets impacts labor supply response and total excess burden of income tax. In our model individuals are allowed to change their asset portfolio to reduce their tax liabilities, and this distortion is the main source of the higher efficiency cost in our model. Furthermore, we show that ignoring the avoidance responses leads to biased results when estimating the labor supply distortion and welfare cost of a tax reform. Progressivity of a given tax system is predicted to be less than the formal tax code due to tax avoidance through tax arbitrage.
참고문헌 (20)
- Agell, J., "Tax Arbitrage and Labor Supply", Journal of Public Economics, 78(1-2), pp.3~24 (2000)
- Agell, J., "Incentives and Redistribution in the Welfare State: the Swedish Tax Reform" (1998), Macmillan Press
- Akcigit, U., "Taxation and the International Mobility of Inventors", American Economic Review, 106(10), pp.2930~2981 (2016)
- Altshuler, R., "Tax Arbitrage, the Choice of Tax Base, and the Prospects for the Tax Reform", Proceedings of the Annual Conference on Taxation Held under the Auspices of the National Tax Association-Tax Institute of America, 88, pp.236~241 (1995)
- Auerbach, A. J., "The Economic Effects of the Tax Reform Act of 1986", Journal of Economic Literature, 35(2), pp.589~632 (1997)
- Capital Gains Taxation and Tax Avoidance: New Evidence from Panel Data, "Auerbach, A. J.", NBER, ~, pp.NBER Working Paper 1399 (1998)
- Brys, B., "Making Reform Happen: Lessons from OECD Countries", pp.101~128 (2010), OECD Publishing
- Desai, M. A., "Taxes, Institutions and Foreign Diversification Opportunities", Journal of Public Economics, 93(5-6), pp.703~714 (2009)
- Feldstein, M., "Tax Avoidance and the Deadweight Loss of the Income Tax", Review of Economics and Statistics, 81(4), pp.674~680 (1999)
- Harberger, A. C., "The Measurement of Waste", American Economic Review, 54(3), pp.58~76 (1964)
- Mayshar, J., "Taxation with Costly Administration", Scandinavian Journal of Economics, 93(1), pp.75~88 (1991)
- How Costly Is Tax Avoidance? Evidence from Structural Estimati, "McClure, C.", Chicago Booth Research, ~, pp.Chicago Booth Research Paper No.19-14 (2020)
- Nagac, K., "Income Tax Distortions and Tax Arbitrage", International Journal of Management and Applied Science, 1(11), pp.40~42 (2015)
- Piketty, T., "Optimal Taxation of Top Labor Incomes : A Tale of Three Elasticities", American Economic Journal : Economic Policy, 6(1), pp.230~271 (2014)
- Slemrod, J., "A General Model of the Behavioral Response to Taxation", International Tax and Public Finance, 8(2), pp.119~128 (2001)
- Slemrod, J., "Handbook of Public Economics Vol. 3", pp.1423~1470 (2002), Elsevier
- Sørensen, P. B., "From the Global Income Tax to the Dual Income Tax : Recent Tax Reforms in the Nordic Countries", International Tax and Public Finance, 1(1), pp.57~79 (1994)
- Stiglitz, J. E., "Some Aspects of the Taxation of Capital Gains", Journal of Public Economics, 21(2), pp.257~294 (1983)
- Yousefi, K., "Import Tax Evasion and Avoidance : Evidence from Iran", The Quarterly Review of Economics and Finance, 75, pp.31~39 (2020)
- Ziliak, J. P., "Estimating Life Cycle Labor Supply Tax Effects", Journal of Political Economy, 107(2), pp.326~359 (1999)