What Makes a Tax Evader?

123 Pages Posted: 19 Feb 2021 Last revised: 20 Dec 2021

See all articles by Marcelo Bergolo

Marcelo Bergolo

Universidad de la Republica - Instituto de Economía; IZA Institute of Labor Economics

Martin Leites

Universidad de la República

Ricardo Perez-Truglia

University of California, Berkeley; National Bureau of Economic Research (NBER)

Matias Strehl

Universidad de la Republica

Multiple version iconThere are 2 versions of this paper

Date Written: December 16, 2020

Abstract

Why do some individuals choose to evade taxes while others do not? One popular view is that some individuals cheat on their taxes because they are more dishonest, selfish, or perceive different social norms. There is, however, little direct evidence on this matter. In collaboration with the national tax agency in Uruguay, we address this question using a combination of surveys and administrative records. Leveraging a unique institutional setting, we measure individual-level evasion choices. We document significant variation in evasion decisions across individuals. For a subsample of 6,078 taxpayers, we use survey questions and incentivized laboratory games to measure traits such as honesty, selfishness, and perceived social norms. We find that these individual characteristics have some power to predict who evades taxes. However, other factors, such as the marginal tax rates and the behavior of peers, play a bigger role.

Keywords: tax evasion, tax morale, social preferences, social norms

JEL Classification: C93, H26, K34, K42, Z13

Suggested Citation

Bergolo, Marcelo and Leites, Martin and Perez-Truglia, Ricardo and Strehl, Matias, What Makes a Tax Evader? (December 16, 2020). Available at SSRN: https://ssrn.com/abstract=3750462 or http://dx.doi.org/10.2139/ssrn.3750462

Marcelo Bergolo

Universidad de la Republica - Instituto de Economía ( email )

Montevideo
Uruguay

HOME PAGE: http://www.marcelobergolo.com

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Martin Leites

Universidad de la República ( email )

Avenida 18 de Julio 182
Montevideo, 11100
Uruguay

Ricardo Perez-Truglia (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Matias Strehl

Universidad de la Republica ( email )

Gonzalo Ramirez 1926
Montevideo, 11200
Uruguay

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