eprintid: 3911
rev_number: 8
eprint_status: archive
userid: 1233
dir: disk0/00/00/39/11
datestamp: 2007-07-09
lastmod: 2019-09-26 17:12:43
status_changed: 2007-11-07 02:33:12
type: paper
metadata_visibility: show
abstract: In the presence of the underground economy taxes give rise to a deadweight loss from displacement of efficient producers by inefficient producers. We consider an economy in which a producer faces two types of costs: the cost of production, and taxes. If the ability to evade taxes is inversely proportional to the ability to keep production costs down, high tax rates may cause inefficient producers to crowd out efficient producers. We estimate this deadweight loss from surveys of 426 Czech firms taken in 2004 and 2005. We find that the deadweight loss due to this crowding out can be several times as large as the triangle deadweight losses from discouraged consumption. Our paper provides the first estimates ever of the displacement loss from tax evasion.
creators_name: Hanousek, Jan
creators_name: Palda, Filip
creators_id: Jan.Hanousek@cerge-ei.cz
creators_id: Filip_Palda@enap.ca
date: 2007-06
date_issue: 2007-06
file_format: pdf
file_url: http://mpra.ub.uni-muenchen.de/3911/01/MPRA_paper_3911.pdf
full_text_status: public
identifierabstract: http://mpra.ub.uni-muenchen.de/3911/
institutions: École nationale d'administration publique
institution: École nationale d'administration publique
ispublished: unpub
keywords: Underground economy; social cost of public funds; taxation
language: en
pages: 25
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subjects: H26
subjects: H21
title: Is there a Displacement Deadweight Loss from Tax Evasion? Estimates Using Firm Surveys from the Czech Republic
citation:   Hanousek, Jan and Palda, Filip  (2007): Is there a Displacement Deadweight Loss from Tax Evasion? Estimates Using Firm Surveys from the Czech Republic.    
document_url: https://mpra.ub.uni-muenchen.de/3911/1/MPRA_paper_3911.pdf