Tax Evasion and Capital Taxation
Rotberg, Shahar
Tax Evasion and Capital Taxation - Journal of Political Economy 2024 - 2488-2529
Wealth inequality has prompted calls for higher taxes on capital income and wealth but also concerns that rich households would respond by concealing their assets offshore. We use a general equilibrium model to study how taxing capital more heavily would affect offshore tax evasion and how this would affect the broader economy. Without evasion, tax revenue could be increased dramatically, inequality could be reduced, and widespread welfare gains could be achieved. After accounting for evasion, however, tax revenue would rise marginally or even fall, inequality would increase, and widespread welfare losses would result.
0022-3808
Capital Income
Capital Taxation
Tax Revenue
Wealth Inequality
Tax Evasion
Tax Evasion and Capital Taxation - Journal of Political Economy 2024 - 2488-2529
Wealth inequality has prompted calls for higher taxes on capital income and wealth but also concerns that rich households would respond by concealing their assets offshore. We use a general equilibrium model to study how taxing capital more heavily would affect offshore tax evasion and how this would affect the broader economy. Without evasion, tax revenue could be increased dramatically, inequality could be reduced, and widespread welfare gains could be achieved. After accounting for evasion, however, tax revenue would rise marginally or even fall, inequality would increase, and widespread welfare losses would result.
0022-3808
Capital Income
Capital Taxation
Tax Revenue
Wealth Inequality
Tax Evasion