The tax evasion social multiplier: Evidence from Italy - Sciences Po Access content directly
Journal Articles Journal of Public Economics Year : 2012

The tax evasion social multiplier: Evidence from Italy

Roberto Galbiati
Giulio Zanella
  • Function : Author

Abstract

We estimate social externalities of tax evasion in a model where congestion of the auditing resources of local tax authorities generates a social multiplier. Identification is based on a contrast of the variance of tax evasion at different levels of aggregation. We use a unique data set that contains audits of about 80,000 small businesses and professionals in Italy and also provides an exact measure of reference groups in our model. We find a social multiplier of about 3, which means that the equilibrium response to a shock that induces an exogenous variation in mean concealed income is about 3 times the initial average response. This is a short-run effect that persists to the extent that auditing resources are not adjusted to internalize the congestion externality.
Fichier principal
Vignette du fichier
2012-galbiati-the-tax-evasion-social-multiplier.pdf (273.24 Ko) Télécharger le fichier
Origin : Files produced by the author(s)

Dates and versions

hal-03574131 , version 1 (15-02-2022)

Identifiers

Cite

Roberto Galbiati, Giulio Zanella. The tax evasion social multiplier: Evidence from Italy. Journal of Public Economics, 2012, ⟨10.1016/j.jpubeco.2012.01.003⟩. ⟨hal-03574131⟩
29 View
31 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More