Tax Structure and Tax Compliance

A model of individual tax compliance behavior, including evasion and avoidance, is developed and estimated. The model recognizes the importance of marginal income tax rates, payroll tax contributions and benefits, and the probability of detection and the penalty on unpaid taxes. Share equations for avoidance, evasion and reported income are estimated using individual-level data. The estimation results indicate that the tax base rises with higher benefits for payroll tax contributions and falls with higher marginal tax rates; the base also falls with more severe penalties and more certain detection of evasion as individuals substitute towards avoidance income

An Evaluation of the Structure of the Jamaican Individual Income Tax

The individual income tax is one of Jamaica\u27s most productive sources of government revenue, and certainly its most visible. Before reform, both the structure and the administration of the tax were badly flawed. As a result, the tax produced less revenue than it might have, was unfair in its distribution of tax burdens, and created severe disincentives for private sector economic growth. The material presented in the chapter provided the background data on which the 1986 reform was built

Income Tax Evasion

Jamaica\u27s 1986 personal income tax reform moved the nation well along toward tax simplification, a more uniform and fair treatment of taxpayers, removal of disincentives to in­creased work effort and to work effort allocation across sectors and a more level playing field for investment. The major elements of the reform are a flat rate income tax, a higher income exemption level, and the elimination of all tax credits and most nontaxable perquisites. While the impact of the reform on revenues and on the burden of various types of taxpayers has been carefully analyzed, much less has been done in terms of studying the impact on those who do not pay -- ­those who evade the income tax by either under­reporting or not filing. This paper presents estimates of the amount, structure and deter­minants of evasion by Jamaica\u27s hard-to-tax sec­tor, the self-employed. It should be emphasized at the outset that Jamaica\u27s problems with income tax evasion are not solved by the flat tax. While the new system lessens the rewards for evasion and through simplification makes compliance and monitoring easier, it will not automatically draw the self­-employed into the tax net. Why would a person who is successful at evading tax at a 57 1/2 percent marginal rate voluntarily come forward to pay because the rate has been dropped to 33 1/3 per­cent? The structural reform must be accompanied by a vigorous program of administrative im­provements. This is all the more reason to conduct a careful analysis of the amount and structure of income tax evasion. How much additional tax revenue could be captured in an effective pro­gram of enforcement, and what income groups, occupations, etc., should be targeted for increased coverage, examination and audit? The next section of this chapter summarizes the results of analyses of the national income accounts and the taxpaying characteristics of a random sample of six professional occupations. Both approaches are meant to infer the total amount of self-employed income tax evasion. The methodology used in drawing and analyzing a much larger and more representative sample of self-employed individuals is discussed in the fol­lowing section. Then we turn in the next three sections to the heart of this work: an analysis of filing rates and of the characteristics of self-­employed filers, an analysis of the revenue loss that results from those who do not file, and an analysis of audit/examination reports to estimate and explain the degree of underreporting by self­-employed filers. The final section of the paper is concerned with how tax policy and tax administration might be altered to draw the self­-employed into the tax net

Audit Selection and Income Tax Underreporting in the Tax Compliance Game

This paper uses a game-theoretic model of the tax compliance game to estimate a model of audit selection and income tax underreporting in Jamaica. The empirical analysis make use of audited tax returns for individual taxpayers, and a random sample of tax returns for the population from which the audited returns are selected. The estimation results strongly indicate a nonrandom audit strategy, and thus provide support for the game-theoretic approach. The results also indicate that the probability of underreporting and the level of underreporting are positively related to the marginal tax rate and to income, and negatively related to marginal payroll tax benefits; in general, the underreporting elasticities are small

OpWise: Operons aid the identification of differentially expressed genes in bacterial microarray experiments

BACKGROUND: Differentially expressed genes are typically identified by analyzing the variation between replicate measurements. These procedures implicitly assume that there are no systematic errors in the data even though several sources of systematic error are known. RESULTS: OpWise estimates the amount of systematic error in bacterial microarray data by assuming that genes in the same operon have matching expression patterns. OpWise then performs a Bayesian analysis of a linear model to estimate significance. In simulations, OpWise corrects for systematic error and is robust to deviations from its assumptions. In several bacterial data sets, significant amounts of systematic error are present, and replicate-based approaches overstate the confidence of the changers dramatically, while OpWise does not. Finally, OpWise can identify additional changers by assigning genes higher confidence if they are consistent with other genes in the same operon. CONCLUSION: Although microarray data can contain large amounts of systematic error, operons provide an external standard and allow for reasonable estimates of significance. OpWise is available at

The Nucleon Spectral Function at Finite Temperature and the Onset of Superfluidity in Nuclear Matter

Nucleon selfenergies and spectral functions are calculated at the saturation density of symmetric nuclear matter at finite temperatures. In particular, the behaviour of these quantities at temperatures above and close to the critical temperature for the superfluid phase transition in nuclear matter is discussed. It is shown how the singularity in the thermodynamic T-matrix at the critical temperature for superfluidity (Thouless criterion) reflects in the selfenergy and correspondingly in the spectral function. The real part of the on-shell selfenergy (optical potential) shows an anomalous behaviour for momenta near the Fermi momentum and temperatures close to the critical temperature related to the pairing singularity in the imaginary part. For comparison the selfenergy derived from the K-matrix of Brueckner theory is also calculated. It is found, that there is no pairing singularity in the imaginary part of the selfenergy in this case, which is due to the neglect of hole-hole scattering in the K-matrix. From the selfenergy the spectral function and the occupation numbers for finite temperatures are calculated.Comment: LaTex, 23 pages, 21 PostScript figures included (uuencoded), uses prc.sty, aps.sty, revtex.sty, psfig.sty (last included

A Program for Reform

The Government undertook a far-reaching revision of the individual income tax in January 1986. The purpose here is to present the analysis that led to the reform, to review and evaluate selected elements of the reform, and to report the results of the first year\u27s experience with the new system. This chapter closes with an agenda of unfinished business, i.e., a statement of what is yet to be done to complete the structural reform of the individual income tax