6,034 research outputs found
Mathematical models describing the effects of different tax evasion behaviors
Microscopic models describing a whole of economic interactions in a closed
society are considered. The presence of a tax system combined with a
redistribution process is taken into account, as well as the occurrence of tax
evasion. In particular, the existence is postulated, in relation to the level
of evasion, of different individual taxpayer behaviors. The effects of the
mentioned different behaviors on shape and features of the emerging income
distribution profile are investigated qualitatively and quantitatively.
Numerical solutions show that the Gini inequality index of the total population
increases when the evasion level is higher, but does not depend significantly
on the evasion spread. For fixed spread, the relative difference between the
average incomes of the worst evaders and honest taxpayers increases
approximately as a quadratic function of the evasion level.Comment: To appear in J. of Economic Interaction and Coordinatio
Economic inequality and mobility in kinetic models for social sciences
Statistical evaluations of the economic mobility of a society are more
difficult than measurements of the income distribution, because they require to
follow the evolution of the individuals' income for at least one or two
generations. In micro-to-macro theoretical models of economic exchanges based
on kinetic equations, the income distribution depends only on the asymptotic
equilibrium solutions, while mobility estimates also involve the detailed
structure of the transition probabilities of the model, and are thus an
important tool for assessing its validity. Empirical data show a remarkably
general negative correlation between economic inequality and mobility, whose
explanation is still unclear. It is therefore particularly interesting to study
this correlation in analytical models. In previous work we investigated the
behavior of the Gini inequality index in kinetic models in dependence on
several parameters which define the binary interactions and the taxation and
redistribution processes: saving propensity, taxation rates gap, tax evasion
rate, welfare means-testing etc. Here, we check the correlation of mobility
with inequality by analyzing the mobility dependence from the same parameters.
According to several numerical solutions, the correlation is confirmed to be
negative.Comment: 11 pages, 6 figures. Proceedings of the Sigma-Phi Conference on
Statistical Physics, Rhodes, 201
Measuring the Size of the Informal Economy: A Critical Review
There has been a burgeoning number of studies attempting to measure the size of the ‘black’ economy. These are based on a variety of methodologies and provide a range of estimates, not just across countries but also within the same countries and often by the same author(s). This raises a number of issues: What is meant by the term ‘black’ economy? Is it an appropriate description? What, if any, is the theory underlying the estimates of informal economic activity? This paper examines these and other issues, and concludes that whilst the existence of what we prefer to call the ‘informal’ or ‘grey’ economy in most countries is incontrovertible, there is a lack of consensus on the appropriate methodology for estimating its size. More importantly, the large number of studies so far are simply exercises in measurement without theory, though we are sceptical that even with strong theoretical underpinnings it is possible to provide accurate estimates of a complicated web of informal activities.Informal, grey and black economy, tax evasion, criminal activities
Tax Toleration and Tax Compliance: How Government Affects the Propensity of Firms to Enter the Unofficial Economy
How do government-supplied institutional benefits and the taxation and regulation of producers affect the propensity of private�firms to enter the unofficial economy and evade taxation? We propose a model in which the incentive of firms to operate underground depends on tax rates relative to �firm-specific thresholds of tax toleration that are decisively affected by quality of governance �in particular by the presence of high-grade institutions delivering services enhancing official production that anchor profit-maximizing firms to the official economy. Some key predictions of the model concerning the determinants of�firms�tax toleration and tax compliance receive broad support from empirical analyses of enterprise-level data from the World Bank's World Business Environment Surveys.tax toleration, tax compliance, tax evasion, corruption, quality of government, institutions, unofficial production, black economy, shadow economy, underground economy, micro political economy of firm behavior
Tax-benefit systems, income distribution and work incentives in the European Union
In this paper we study the impact of tax-benefit systems on income inequality and work incentivesacross the 27 Member States of the European Union (EU). Using EUROMOD, the EU-wide taxbenefitmicrosimulation model, we disentangle the role of taxes, benefits and social insurancecontributions in influencing country specific Gini coefficients and Marginal Effective Tax Rates.The extent to which tax-benefit systems contribute to income redistribution and provide work incentives at the intensive margin is found to vary considerably across the 27 Member States of the EU. Our results further highlight the presence of a trade-off between income redistribution and work incentives across EU-27 countries
Microsimulation and Policy Analysis
We provide an overview of microsimulation approaches for assessing the effects of policy on income distribution. We focus on the role of tax-benefit policies and review the concept of microsimulation and how it contributes to the analysis of income distribution in general and policy evaluation in particular. We consider the main challenges and limitations of this approach and discuss directions for future developments
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