Tax amnesties and the insurance effect: An experimental study

Christian Koch; Cornelius Müller

doi:10.1016/j.socec.2023.102130

Titel

Tax amnesties and the insurance effect: An experimental study

Autor*in

Christian Koch

Institut für Volkswirtschaftslehre, Fakultät für Wirtschaftswissenschaften, Universität Wien

Cornelius Müller

Daimler Truck AG

Abstract

Many countries grant exemption from legal prosecution under certain conditions, allowing for voluntary disclosures regarding tax evasion. Empirically, tax amnesties appear most successful when accompanied by an increase in enforcement efforts as they help evaders to adjust to the new circumstances. Time-limited amnesties are frequently repeated and, in some countries, even made permanent. Anticipated tax amnesties can, however, serve as an insurance against a rise in the detection probability, potentially leading to less and not more tax compliance. We test the behavioral relevance of this insurance effect in an experimental tax game and find that it indeed decreases overall tax compliance by about 9-10 percent, highlighting its relevance for the design of tax policies. A high predictability of amnesties may work to their detriment.

Stichwort

Tax complianceTax amnestyLab experimentSocial norms

Objekt-Typ

journal article

Sprache

Englisch [eng]

Persistent identifier

phaidra.univie.ac.at/o:2044819

DOI

10.1016/j.socec.2023.102130

Erschienen in

Titel