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http://hdl.handle.net/2451/31654
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| Title: | Exploring Tax Evasion in the Context of Political Uncertainty |
| Authors: | Katz, Barbara G.
Owen, Joel |
| Keywords: | Tax evasion, political uncertainty, economic uncertainty
policy uncertainty, economies in transition |
| Issue Date: | 27-Nov-2012 |
| Abstract: | We present a model of agents facing the uncertainty of two future forms
of government who are able to insure against this uncertainty by hiding
funds from taxation. In order to choose whether or not to hide funds
from taxation, agents need to know policy choices that each government
would make should it come to power. But each government, before it could
make its decision, would need to know the choices of the agents who
would, for example, produce tax revenues. This informational tension is
resolved endogenously. We derive the resulting level of tax evasion in
society and the optimal choices made by the potential governments. We
examine how changes in governmental structure would affect the level of
tax evasion, and how that, in turn, would affect a particular form of
capital flight. |
| URI: | http://hdl.handle.net/2451/31654 |
| Appears in Collections: | Economics Working Papers
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