Determinants of aggregate income-tax-evasion behavior: The case of the US

Banca Nazionale del Lavoro Quarterly Review, Sep 1998 by Cebula, Richard J

The author is extremely grateful to Ed Feige and Vito Tanzi for data provision and for insightful comments and suggestions. He also is grateful for contributions by Jim Alm, Brian Erard and Joel Slemrod. Naturally, the usual caveat applies.

1 For instance, using a sample (for 1987) of 716 tax filers in the state of Oregon and audit and income tax data for these Oregon taxpayers obtained from the IRS, Erard and Feinstein (1994) attempt to assess the role of expected tax audits as well as guilt and shame in determining the underreporting of income. Studies such as Clotfter (1983), using actual individual tax return information, find that higher tax brackets are associated with higher degrees of underreporting.

2 Feige (1994, p. 135, n. 18) states that "The average tax rate is simply the sum of total government tax receipts divided by AGI [aggregate]". In this study, the AEPIT variable is total federal government income tax receipts from individuals divided by the aggregate AGI.

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