We model the optimal intertemporal decision of an agent who chooses tax evasion and consumption, over an infinite lifetime horizon, where consumption is driven by habits. We find the following: (i) tax evaders reduce consumption in the early stages of habit accumulation and increase it over time; (ii) habit formation has a dampening effect on tax evasion; (iii) neglecting tax evasion can lead to habit overestimation; (iv) the effect of the tax rate on tax evasion is ambiguous; (v) heavy fines are more efficient than frequent controls in reducing tax evasion.
Autori: | |
Data di pubblicazione: | 2020 |
Titolo: | Dynamic Tax Evasion with Habit Formation in Consumption |
Rivista: | SCANDINAVIAN JOURNAL OF ECONOMICS |
Digital Object Identifier (DOI): | http://dx.doi.org/10.1111/sjoe.12365 |
Volume: | 122 |
Appare nelle tipologie: | 2.1 Articolo su rivista |
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