Public goods, hidden income, and tax evasion: Some nonstandard results from the warm-glow model

• 成果类型: Article
• 署名作者: Hungerman, Daniel M.
• 署名单位: University of Notre Dame; National Bureau of Economic Research
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2014.04.004
• 发表日期: 2014
• 页码: 188-202
• 关键词: Crowd out; Inter-family transfers; Tax evasion

摘要

A large literature explores crowd out in situations where public goods are jointly provided; work in this area typically depicts a tax system where individuals take taxes as given. But in some settings, such as those in developing economies, efforts to evade or avoid taxes may be widespread. Using the canonical warm-glow model, this paper considers joint public-good provision in a setting where individuals can evade taxes by hiding their income. The model's implications change significantly in this setting: with hidden income, stronger warm glow will lead to greater crowd out, not less. Using research on crowd out and inter-family transfers, I present suggestive evidence that the model's results may help to reconcile divergent estimates of crowd out in the literature. (C) 2014 Elsevier B.V. All rights reserved.