Tax Evasion and Capital Taxation

By:

Rotberg, Shahar

Contributor(s):

Steinberg, Joseph B

Material type:

Continuing resourcePublication details: Journal of Political Economy; 2024Description: 2488-2529ISSN:

0022-3808

Subject(s):

Online resources:

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Summary: 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.

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Holdings
Item type	Current library	Call number	Vol info	Status	Date due	Barcode
Article Index	Dr VKRV Rao Library		Vol. 132, No. 7	Not for loan		AI738

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.

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