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Tax compliance under tax regime changes

By Friedrich Heinemann and Martin Kocher

Abstract

In this paper we focus on the compliance effects of tax regime changes. According to the economic model of tax evasion, a tax reform should affect compliance through its impact on tax rates and incentives. Our findings demonstrate the importance of at least two further effects not covered by the traditional model: First, reform losers tend to evade more taxes after the reform. Second, a reform from a proportionate to a progressive system decreases compliance compared to a switch in the reverse direction. However, the level of compliance is generally higher under a progressive than under a proportionate regime

Topics: 330 Wirtschaft
Year: 2010
OAI identifier: oai:ub-madoc.bib.uni-mannheim.de:2927

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