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on Informal and Underground Economics |
| By: | Niels Johannesen; Patrick Langetieg; Daniel Reck; Max Risch; Joel Slemrod |
| Abstract: | In 2008, the IRS initiated efforts to curb the use of offshore accounts to evade taxes. This paper uses administrative microdata to examine the impact of the enforcement efforts on taxpayers’ reporting of offshore accounts and income. Enforcement caused approximately 60,000 individuals to disclose offshore accounts with a combined value of around $120 billion. Most disclosures happened outside offshore voluntary disclosure programs by individuals who never admitted prior noncompliance. The disclosed accounts were concentrated in countries whose institutions facilitate tax evasion. The enforcement-driven disclosures increased annual reported capital income by $2.5-$4 billion corresponding to $0.7-$1.0 billion in additional tax revenue. |
| JEL: | H24 H26 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24366&r=iue |
| By: | Alstadsaeter, Annette; Johannesen, Niels; Zucman, Gabriel |
| Abstract: | This paper estimates the size and distribution of tax evasion. We combine random audits, tax amnesties, and leaks from offshore financial institutions matched to wealth records in Scandinavia. Tax evasion rises sharply with wealth: 3% of personal taxes are evaded on average, versus 25%–30% in the top 0.01% of the wealth distribution. A model of the supply of evasion services can explain this gradient. Taking tax evasion into account increases inequality substantially. After using tax amnesties, evaders do not seem to increase legal tax avoidance, suggesting that fighting evasion can allow governments to collect more taxes from the wealthy. |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12781&r=iue |
| By: | Rubina Verma (Instituto Tecnologico Autonomo de Mexico (ITAM)); Rahul Giri (International Monetary Fund) |
| Abstract: | This paper characterizes informality in output and employment in the Indian economy for the period 1978-2005, with a special emphasis on the manufacturing sector. We first present statistics on growth and employment for India as well as for three sectors - agriculture, industry and services- for the time period 1950-2005. We also present data on employment in informal and formal enterprises using National Sample Survey data and highlight how informality in both formal and informal enterprises has grown over the years. This is further confirmed by comparing India with 40 other developing countries, where we find that the share of informal employment in non-agricultural employment is the highest among all the countries, and Indian manufacturing is a sector where the degree of informality is strikingly high. We document informality in Indian manufacturing carefully by examining detailed data on value added, employment, capital-labor ratios and trade at the 3 digit level for the manufacturing industries during the 1978-2010 period and highlight those industries in which informality has been increasing and dominant. Importantly, the level of informality in Indian employment has remained persistently high despite the rapid growth in GDP and GDP per capita seen since 1991, which is when India initiated the process of liberalizing the domestic industrial policy as well as its trade policy. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed017:1566&r=iue |
| By: | Zoran Sapuric; Sanela Shkrijelj; Blazhe Josifovski |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:ftm:policy:2018-01&r=iue |