Voluntary disclosure of evaded taxes - Increasing revenue, or increasing incentives to evade?

Langenmayr, Dominika (2015): Voluntary disclosure of evaded taxes - Increasing revenue, or increasing incentives to evade? In: Journal of Public Economics, -

Abstract

Abstract Many countries apply lower fines to tax evading individuals when they voluntarily disclose the tax evasion they committed. I model such voluntary disclosure mechanisms theoretically and show that while such mechanisms increase the incentive to evade taxes, they nevertheless increase tax revenues net of administrative costs. I confirm the importance of administrative costs in a survey of German competent local tax authorities. I then test the effects of voluntary disclosure on the tax evasion decision, using the introduction of the 2009 offshore voluntary disclosure program in the U.S. for identification. The analysis confirms that the introduction of voluntary disclosure increases tax evasion.

• Item Type: Journal article
• Form of publication: Publisher's Version
• Keywords: Tax evasion; Voluntary disclosure; Self-reporting
• Faculties: Economics; Economics > Chairs; Economics > Chairs > Seminar for Economic Policy
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: H26, K42, H24
• ISSN: 0047-2727
• Language: English