Tax evasion

== Tax evasion and inequality ==
Generally, individuals tend to evade taxes, while companies rather avoid taxes. There is a great heterogenic among people who evade people as it is a substantial issue in society, that is creating an excessive tax gap. Studies suggest that 8% of global financial wealth lies in offshore accounts.<ref name=":0">{{Cite journal|last1=Alstadsæter|first1=Annette|last2=Johannesen|first2=Niels|last3=Zucman|first3=Gabriel|date=2019-06-01|title=Tax Evasion and Inequality|journal=American Economic Review|volume=109|issue=6|pages=2073–2103|doi=10.1257/aer.20172043|issn=0002-8282|doi-access=free}}</ref> Often, offshore wealth that is stored in tax havens stays undetected in random audits.<ref>{{Cite journal|last1=Guyton|first1=John|last2=Langetieg|first2=Patrick|last3=Reck|first3=Daniel|last4=Risch|first4=Max|last5=Zucman|first5=Gabriel|date=2021-03-22|title=Tax Evasion at the Top of the Income Distribution: Theory and Evidence|series=Working Paper Series |doi=10.3386/w28542|s2cid=233637494|url=https://www.nber.org/papers/w28542|language=en|doi-access=free}}</ref> Even though there is high diversity among people who evade taxes, there is a higher probability among the highest wealth group. According to Alstadsæter, Johannesen and Zucman 2019 the extent of taxes evaded is substantially higher with higher income, and exceptionally higher among people of the top wealth group.<ref name=":0" /> In line with this, the probability to appear in the [[Panama Papers]] rises significantly among the top 0.01% of the wealth group, as does the probability to own an unreported account at HSBC. However, the upper wealth group is also more inclined to use tax amnesty.<ref name=":0" />