Tax Evasion in a Unionised Economy

In a unionised labour market, a substitution of a payroll for an income tax will not alter employment if tax obligations are fulfilled. However, if workers or firms can evade taxes this irrelevance result might no longer apply. This will especially be the case if the fine for tax evasion depends on undeclared income or on wage payments or if withholding regulations prevent optimal evasion choices. In such instances, tax evasion opportunities make the legal incidence of taxes an important determinant of their economic incidence and employment can rise with a substitution of an income for a payroll tax.

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Year of publication:	2001
Authors:	Goerke, Laszlo
Publisher:	Bonn : Institute for the Study of Labor (IZA)
Subject:	Steuerkriminalität \| Lohnsteuer \| Einkommensteuer \| Steuerwirkung \| Lohnverhandlungstheorie \| Gewerkschaft \| Theorie \| Economic incidence \| legal incidence \| penalty \| tax evasion \| trade union

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Series:	IZA Discussion paper series ; 382
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	844212148 [GVK] hdl:10419/21242 [Handle]
Classification:	H26 - Tax Evasion ; J64 - Unemployment: Models, Duration, Incidence, and Job Search ; H22 - Incidence ; J51 - Trade Unions: Objectives Structure, and Effects
Source:	EconStor