Abstract

http://ssrn.com/abstract=920344
 
 

References (41)



 
 

Citations (2)



 


 



Tax Avoidance, Endogenous Social Norms, and the Comparison Income Effect


Alessandro Balestrino


Universita di Pisa - Dipartimento di Scienze Economiche; CESifo (Center for Economic Studies and Ifo Institute)

July 2006

CESifo Working Paper Series No. 1758

Abstract:     
We present a model of income tax avoidance with heterogeneous agents, assuming the presence of a comparison income effect and of a psychic cost (disutility) of tax dodging. We analyse the policy preferences of the agents, and identify a median-voter political equilibrium. Paralleling previous results in the optimal taxation literature, we show that the comparison income effect calls for a high degree of progressivity of the income tax; additionally, we find that this tendency is strengthened by the psychic cost of avoidance. We then model the endogenous formation of the stigma attached to the act of avoidance as a "conformism game". We argue that such stigma is motivated by the desire to make redistribution more effective, and that it is enhanced by the income comparison effect.

Number of Pages in PDF File: 31

Keywords: tax avoidance, social norms, conformism, comparison income, median voter

JEL Classification: D72, H26, H31

working papers series


Download This Paper

Date posted: July 25, 2006  

Suggested Citation

Balestrino, Alessandro, Tax Avoidance, Endogenous Social Norms, and the Comparison Income Effect (July 2006). CESifo Working Paper Series No. 1758. Available at SSRN: http://ssrn.com/abstract=920344

Contact Information

Alessandro Balestrino (Contact Author)
Universita di Pisa - Dipartimento di Scienze Economiche ( email )
Sede di Scienze Politiche, via Serafini 3
I-56126 Pisa
Italy
+39 050 221 2437 (Phone)
+39 050 221 2450 (Fax)
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Feedback to SSRN


Paper statistics
Abstract Views: 837
Downloads: 143
Download Rank: 118,000
References:  41
Citations:  2

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.282 seconds