Taxes on the Internet: Deterrence Effects of Public Disclosure

34 Pages Posted: 19 Feb 2013

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Thor O. Thoresen

Statistics Norway - Research Department; CESifo (Center for Economic Studies and Ifo Institute)

Erlend E. Bo

Statistics Norway

Date Written: February 18, 2013

Abstract

Supporters of public disclosure of personal tax information point to its deterrent effect on tax evasion, but this effect has not been empirically explored. Although Norway has a long tradition of public disclosure of tax filings, it took a new direction in 2001 when anyone with access to the Internet could obtain individual information on income, wealth, and income and wealth taxes paid. We exploit this change in the degree of exposure to identify the effects of public disclosure on income reporting. Identification of the deterrence effects of public disclosure is facilitated by the fact that, prior to the shift to the Internet in 2001, some municipalities had exposure which was close to the Internet type of public disclosure, as tax information was distributed widely through paper catalogues that were locally produced and disseminated. We observe income changes that are consistent with public disclosure deterring tax evasion: an approximately 3 percent average increase in reported income is found among business owners living in areas where the switch to Internet disclosure represented a large change in access.

Keywords: tax evasion, income reporting, quasi-experiments

JEL Classification: H300, H250

Suggested Citation

Slemrod, Joel B. and Thoresen, Thor O. and Bo, Erlend E., Taxes on the Internet: Deterrence Effects of Public Disclosure (February 18, 2013). CESifo Working Paper Series No. 4107. Available at SSRN: https://ssrn.com/abstract=2220132

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
Ann Arbor, MI 48109-1234
United States
734-936-3914 (Phone)
734-763-4032 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Thor O. Thoresen (Contact Author)

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Erlend E. Bo

Statistics Norway ( email )

N-0033 Oslo
Norway

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