Lisi, Gaetano (2012): Unemployment, tax evasion and the "slippery slope" framework.
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The proposed theoretical work introduces the basic insights of the ‘slippery slope’ framework into the benchmark macroeconomic model of the labour market in order to study the relation between tax compliance (both voluntary and enforced), tax evasion and unemployment. This paper shows that the firm's decision to evade taxes also depends on trust in tax authorities, and affects one of the most important macroeconomic variables: the unemployment rate. Also, the model is able to mimic the crucial interaction between trust and power and its effects on voluntary and enforced compliance. The main result is that with the “right mix” of policy tools of deterrence, trust in tax authorities is maximised, (voluntary) tax compliance increases and a reduction of tax evasion may decrease unemployment.
|Item Type:||MPRA Paper|
|Original Title:||Unemployment, tax evasion and the "slippery slope" framework|
|Keywords:||tax evasion; tax compliance; trust and power; unemployment|
|Subjects:||J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J64 - Unemployment: Models, Duration, Incidence, and Job Search
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior > K42 - Illegal Behavior and the Enforcement of Law
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H26 - Tax Evasion and Avoidance
|Depositing User:||Gaetano Lisi|
|Date Deposited:||18. Mar 2012 13:34|
|Last Modified:||12. Feb 2013 15:56|
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