Tax evasion

==Economics==
[[File:German GDP in tax havens.png|thumb|350px|The ratio of German assets in [[tax haven]]s in relation to the total German GDP, 1996–2008.<ref>{{cite journal|first=Shafik|last = Hebous |year=2011 |ssrn=1934164 |title=Money at the Docks of Tax Havens: A Guide |journal= CESifo Working Paper Series |volume = 70 |number =3587|page= 9|doi = 10.1628/001522114X684547 |hdl=10419/52472 |s2cid = 39873207 |url = https://www.cesifo.org/DocDL/cesifo1_wp3587.pdf |hdl-access=free }}</ref> The "Big 7" shown are Hong Kong, Ireland, Lebanon, Liberia, Panama, Singapore, and Switzerland.]]

In 1968, Nobel laureate economist [[Gary Becker]] first theorized the ''economics of crime'',<ref>{{Cite journal |author=Gary Becker |title=Crime and Punishment: An Economic Approach |journal=The Journal of Political Economy |year=1968 |volume=76 |issue=2 |url=https://www.nber.org/chapters/c3625.pdf |pages= 169–217 |doi=10.1086/259394}}</ref> on the basis of which authors M.G. Allingham and A. Sandmo produced, in 1972, an economic model of tax evasion. This model deals with the evasion of income tax, the main source of tax revenue in developed countries. According to the authors, the level of evasion of income tax depends on the detection probability and the level of punishment provided by law.<ref>Allingham, M. G. and A. Sandmo [1972] 'Income Tax evasion: A Theoretical Analysis', Journal of Public Economics, Vol. 1, 1972, pp. 323–38.</ref> Later studies, however, pointed limitations of the model, highlighting that individuals are also more likely to comply with taxes when they believe that tax money is appropriately used and when they can take part on public decisions.<ref>{{Cite book|last=Torgler|first=Benno|url=https://books.google.com/books?id=xFYijxMKjqAC&dq=Tax+compliance+and+tax+morale%3A+A+theoretical+and+empirical+analysis.&pg=PR5|title=Tax Compliance and Tax Morale: A Theoretical and Empirical Analysis|date=2007-01-01|publisher=Edward Elgar Publishing|isbn=978-1-84720-720-3|language=en}}</ref><ref>{{Cite journal|last1=Touchton|first1=Michael|last2=Wampler|first2=Brian|last3=Peixoto|first3=Tiago|date=2021|title=Of democratic governance and revenue: Participatory institutions and tax generation in Brazil|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/gove.12552|journal=Governance|language=en|volume=34|issue=4|pages=1193–1212|doi=10.1111/gove.12552|s2cid=228863220|issn=1468-0491}}</ref><ref>{{Cite journal|last=Alm|first=James|date=2012-02-01|title=Measuring, explaining, and controlling tax evasion: lessons from theory, experiments, and field studies|url=https://doi.org/10.1007/s10797-011-9171-2|journal=International Tax and Public Finance|language=en|volume=19|issue=1|pages=54–77|doi=10.1007/s10797-011-9171-2|s2cid=8221198|issn=1573-6970}}</ref><ref>{{Cite journal|last=Torgler|first=Benno|date=2005-06-01|title=Tax morale and direct democracy|url=https://www.sciencedirect.com/science/article/pii/S0176268004000825|journal=European Journal of Political Economy|language=en|volume=21|issue=2|pages=525–531|doi=10.1016/j.ejpoleco.2004.08.002|issn=0176-2680}}</ref> 

The literature's theoretical models are elegant in their effort to identify the variables likely to affect non-compliance. Alternative specifications, however, yield conflicting results concerning both the signs and magnitudes of variables believed to affect tax evasion. Empirical work is required to resolve the theoretical ambiguities. Income tax evasion appears to be positively influenced by the [[tax rate]], the [[unemployment rate]], the level of income and dissatisfaction with government.<ref name=Cebula>{{cite journal |first1=Richard |last1=Cebula |first2=Edgar L. |last2=Feige |title=America's Underground Economy: Measuring the Size, Growth and Determinants of Income Tax Evasion in the U.S |journal=Mpra Paper |url=https://ideas.repec.org/p/pra/mprapa/29672.html |publisher=Ideas.repec.org|date=n.d.}}</ref> The U.S. [[Tax Reform Act of 1986]] appears to have reduced tax evasion in the United States.<ref>{{Cite journal|last1=Kinsey|first1=Karyl A.|last2=Grasmick|first2=Harold G.|date=1993|title=Did the Tax Reform Act of 1986 Improve Compliance? Three Studies of Pre- and Post-TRA Compliance Attitudes*|url=https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-9930.1993.tb00111.x|journal=Law & Policy|language=en|volume=15|issue=4|pages=293–325|doi=10.1111/j.1467-9930.1993.tb00111.x|issn=1467-9930}}</ref>

In a 2017 study Alstadsæter et al. concluded based on random stratified audits and leaked data that occurrence of tax evasion rises sharply as amount of wealth rises and that the very richest are about 10 times more likely than average people to engage in tax evasion.<ref>Alstadsæter et al. 2017. [https://gabriel-zucman.eu/files/AJZ2017.pdf Tax Evasion and Inequality∗]</ref>