Tax Incentives and Non-Compliance — Evidence from Swedish Micro Data

Public Finance Review, Forthcoming

33 Pages Posted: 15 Aug 2013 Last revised: 21 Sep 2016

See all articles by Annette Alstadsæter

Annette Alstadsæter

School of Economics and Business, NMBU

Martin Jacob

WHU - Otto Beisheim School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: September 17, 2016

Abstract

Using rich Swedish administrative panel data, we are able to observe and analyze a specific type of tax non-compliance, namely, overstatement of a self-reported dividend allowance that can reduce shareholders’ tax liability. Some 3 percent of Swedish owner-managers overstate this allowance during the period 2006-2009. Exploiting a large kink in the income tax schedule, we identify a positive and significant effect of the income tax rate on non-compliance. The estimated elasticity of non-compliance with respect to the marginal tax rate ranges from 0.5 to 0.7, depending on the specification.

Keywords: tax evasion, tax compliance, self-reporting, tax incentive

JEL Classification: H26, H24, D14

Suggested Citation

Alstadsaeter, Annette and Jacob, Martin, Tax Incentives and Non-Compliance — Evidence from Swedish Micro Data (September 17, 2016). Public Finance Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2309856 or http://dx.doi.org/10.2139/ssrn.2309856

Annette Alstadsaeter

School of Economics and Business, NMBU ( email )

Norwegian University of Life Sciences
As
Norway

HOME PAGE: http://https://sites.google.com/view/annettealstadsater/start

Martin Jacob (Contact Author)

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
D-56179 Vallendar, 56179
Germany

HOME PAGE: http://www.whu.edu/steuer

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