Inflation and Tax Evasion: An Empirical Analysis

This paper contains an analysis of the effect of inflation on aggregate tax evasion in the United States over the period 1947-81. It is found that tax evasion in both absolute and relative terms is positively related to the inflation rate. Further, the results indicate that aggregate evasion has risen in both absolute and relative terms with increases in the marginal tax rate, but has fallen with increases in the detection probability, the penalty rate, and the wage share of income. Finally, evasion has risen in absolute terms but has fallen in relative terms when real true income has risen

On the Treatment of Income Tax Rates in Empirical Analysis of Tax Evasion

In this paper, it is argued that average tax rates exert an influence on income tax evasion separate from, and opposite to that of marginal tax rates. Failure to account for this effect in empirical evasion models biases the parameter estimate of the marginal rate in a predictable manner. Evidence from an aggregate empirical model of evasion in the US indicates that the marginal tax rate is positively related to evasion, whereas the average tax rate is negatively related. Further, exclusion of the average rate from the model does in fact bias the parameter estimate of the marginal tax rate

Wage Share, Market Power and Unionism: Some Contrary U.S. Evidence

In a recent article, Cowling and Molho (1982) presented empirical evidence on the relationships among the wage share, market power, and unionism in the U.K. Using multiple regression analysis on cross-sectional 1968 data for 118 industries,1 they found strong, negative relationships between the share of production worker wages in value added and two measures of monopoly power in the product market, namely, concentration and advertising intensity. However, utilizing several alternative measures of union power, they found only limited support for the hypothesis that union power is positively associated with this wage share. Cowling and Molho (hereafter, GM) also examined the relationships between the share of non-production worker salaries in value added and these same market power variables. They found a significant, positive relationship between the salary share and concentration and no relationship between the salary share and advertising intensity. Their one puzzling result was that union power appeared to be more closely related to the salary share of nonproduction workers than it was to the wage share of production workers. The C-M results with respect to the concentration-wage share relationship are inconsistent with the only previously published study on the topic (Maroney and Allen, 1969) but consistent with the unpublished work of Barbee (1974). Since little empirical work has been done on this question, and since no other study has estimated the effect of either advertising or union power on the wage and salary shares, it is clear that more research on these questions is in order

Clock and Category; IS QUANTUM GRAVITY ALGEBRAIC

We investigate the possibility that the quantum theory of gravity could be constructed discretely using algebraic methods. The algebraic tools are similar to ones used in constructing topological quantum field theories.The algebraic tools are related to ideas about the reinterpretation of quantum mechanics in a general relativistic context.Comment: To appear in special issue of JMP. Latex documen

Tax Rates and Tax Evasion: Evidence from California Amnesty Data

The effect of marginal tax rates on income tax evasion is examined using data from the California Tax Amnesty Program, which provided amnesty for people who had not filed returns, had filed inaccurate returns, or were delinquent in paying their tax liabilities. People under criminal investigation were not eligible. After correcting for the selectivity bias, it was found that tax evaders respond to higher marginal tax rates by increasing their evasion activity. The results also confirm the theoretical prediction that people with higher levels of income tend to evade more. The absolute and relative sizes of income and tax rate changes depend on the scope of the evasion measure used. In particular, the absolute effects of income and tax rate changes are larger for the income-based measures of evasion, while the relative effects are larger for the tax-based measure of evasion. Finally, the results suggest that evasion generally is inelastic with respect to changes in both true income and marginal tax rates but that tax rate inelasticities are consistently larger than income elasticities

Holography in the EPRL Model

In this research announcement, we propose a new interpretation of the EPR quantization of the BC model using a functor we call the time functor, which is the first example of a CLa-ren functor. Under the hypothesis that the universe is in the Kodama state, we construct a holographic version of the model. Generalisations to other CLa-ren functors and connections to model category theory are considered.Comment: research announcement. Latex fil