Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands

CentER Discussion Paper Series No. 2020-031

39 Pages Posted: 7 Jan 2021

See all articles by Wouter Leenders

Wouter Leenders

affiliation not provided to SSRN

Arjan Lejour

CPB Netherlands Bureau of Economic Policy Analysis; Tilburg University

Simon Rabaté

Paris School of Economics (PSE)

van 't Riet Maarten

affiliation not provided to SSRN

Date Written: November 2, 2020

Abstract

Exploiting unique datasets covering over 28,000 tax evaders in the Netherlands, we investigate the distribution of tax evasion and its implications for the measurement of wealth inequality. In contrast to Alstadsæter, Johannesen and Zucman (2019), the correction for offshore wealth has only a modest effect on top wealth shares. We show that the distributional pattern of tax evasion depends on the type of tax evasion, e.g. it depends on the offshore country of choice. We explore a number of explanations to account for the differences in results and caution against projecting distributional patterns of detected tax evasion onto still undetected evasion. We also study the dynamic compliance behavior of tax amnesty participants and document large and sustained increases in reported wealth of around 60% following amnesty participation. Combined with evidence of only a modest increase in the adoption of tax avoidance strategies, this suggests that amnesty participation can lead to substantial public revenue gains.

Keywords: Inequality, Wealth, Tax Evasion, Netherlands

JEL Classification: H26, H87, E21

Suggested Citation

Leenders, Wouter and Lejour, Arjan M. and Rabaté, Simon and Maarten, van 't Riet, Offshore Tax Evasion and Wealth Inequality: Evidence from a Tax Amnesty in the Netherlands (November 2, 2020). CentER Discussion Paper Series No. 2020-031, Available at SSRN: https://ssrn.com/abstract=3723731 or http://dx.doi.org/10.2139/ssrn.3723731

Wouter Leenders

affiliation not provided to SSRN

Arjan M. Lejour (Contact Author)

CPB Netherlands Bureau of Economic Policy Analysis ( email )

Bezuidenhoutseweg 30
po box 80510
The Hague, 2594AV
Netherlands
+31 652485843 (Phone)

HOME PAGE: http://www.cpb.nl/en/medewerkers/arjan-lejour

Tilburg University ( email )

PO Box 90153
Tilburg, 5000 LE Ti
Netherlands
+31 652485843 (Phone)

HOME PAGE: http://https://research.tilburguniversity.edu/en/persons/arjan-lejour

Simon Rabaté

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Van 't Riet Maarten

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
104
Abstract Views
332
rank
330,522
PlumX Metrics