Type
Article
Titre
The tax evasion social multiplier: Evidence from Italy
Auteur(s)
GALBIATI Roberto - Université Paris Nanterre (UPN) (Auteur)
ZANELLA Giulio - University of Bologna, Department of Economics (Auteur)
Éditeur
NL : Elsevier
ISSN
00472727
DOI
10.1016/j.jpubeco.2012.01.003
Mots clés
Social interactions, Neighborhood effects, Social multiplier, Tax evasion, Tax compliance, Excess variance
Résumé
EN
We estimate social externalities of tax evasion in a model where congestion of the auditing resources of local tax authorities generates a social multiplier. Identification is based on a contrast of the variance of tax evasion at different levels of aggregation. We use a unique data set that contains audits of about 80,000 small businesses and professionals in Italy and also provides an exact measure of reference groups in our model. We find a social multiplier of about 3, which means that the equilibrium response to a shock that induces an exogenous variation in mean concealed income is about 3 times the initial average response. This is a short-run effect that persists to the extent that auditing resources are not adjusted to internalize the congestion externality.
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