Document Type

Article

Language

eng

Format of Original

11 p.

Publication Date

8-1987

Publisher

Wiley

Source Publication

Kyklos

Source ISSN

0023-5962

Original Item ID

DOI: 10.1111/j.1467-6435.1987.tb00684.x

Abstract

In this paper, it is argued that average tax rates exert an influence on income tax evasion separate from, and opposite to that of marginal tax rates. Failure to account for this effect in empirical evasion models biases the parameter estimate of the marginal rate in a predictable manner. Evidence from an aggregate empirical model of evasion in the US indicates that the marginal tax rate is positively related to evasion, whereas the average tax rate is negatively related. Further, exclusion of the average rate from the model does in fact bias the parameter estimate of the marginal tax rate.

Comments

Accepted version. Kyklos, Vol. 40, No. 3 (August 1987):338-348. DOI. © Wiley, 1987. Used with permission.

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