Inflation and Tax Evasion: An Empirical Analysis

Authors

Steven E. Crane, Marquette UniversityFollow
Farrokh Nourzad, Marquette UniversityFollow

Document Type

Article

Language

eng

Publication Date

5-1986

Publisher

MIT Press

Source Publication

The Review of Economics and Statistics

Source ISSN

0034-6535

Abstract

This paper contains an analysis of the effect of inflation on aggregate tax evasion in the United States over the period 1947-81. It is found that tax evasion in both absolute and relative terms is positively related to the inflation rate. Further, the results indicate that aggregate evasion has risen in both absolute and relative terms with increases in the marginal tax rate, but has fallen with increases in the detection probability, the penalty rate, and the wage share of income. Finally, evasion has risen in absolute terms but has fallen in relative terms when real true income has risen.

Comments

Published version. The Review of Economics and Statistics, Vol. 68, No. 2 (May, 1986): 217-223. DOI. © 1986 The MIT Press. Used with permission.

Recommended Citation

Crane, Steven E. and Nourzad, Farrokh, "Inflation and Tax Evasion: An Empirical Analysis" (1986). Economics Faculty Research and Publications. 591.
https://epublications.marquette.edu/econ_fac/591