publication . Article . 1986

Inflation and Tax Evasion: An Empirical Analysis

Steven E. Crane; Farrokh Nourzad;
Open Access
  • Published: 01 Jan 1986 Journal: Review of Economics & Statistics, volume 68, issue 2 May, pages 217-23
Abstract
This paper contains an analysis of the effect of inflation on aggregate tax evasion in the United States over the period 1947-81. It is found that tax evasion in both absolute and relative terms is positively related to the inflation rate. Further, the results indicate that aggregate evasion has risen in both absolute and relative terms with increases in the marginal tax rate, but has fallen with increases in the detection probability, the penalty rate, and the wage share of income. Finally, evasion has risen in absolute terms but has fallen in relative terms when real true income has risen.
Subjects
Medical Subject Headings: health care economics and organizations
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