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Ralph-C. Bayer, Harald Oberhofer, Hannes Winner (WIFO)
The Occurrence of Tax Amnesties. Theory and Evidence
WIFO Working Papers, 2014, (487), 39 pages
Online since: 09.12.2014 0:00
This paper presents a theoretical model and empirical evidence to explain the occurrence of tax amnesties. We treat amnesties as endogenous, resulting from a strategic game between many tax payers discounting future payments from punishment and a government that trades off costs and benefits of amnesty programmes. From the model we derive hypotheses about the factors that should influence the occurrence of tax amnesties. For our empirical test we rely on amnesty information from US states between 1981 and 2011. In line with the theoretical model, our empirical findings suggest that the likelihood of amnesties is mainly driven by a government's fiscal requirements and the taxpayers' expectations on future amnesties.
Keywords:US states, strategic game, tax amnesties
Research group:Regional Economics and Spatial Analysis
Language:English

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