CIVILIZATION AT A DISCOUNT: THE PROBLEM OF TAX EVASION

Abstract

The paper seeks to review research on tax evasion undertaken in a number of disciplines. The nature and extent of the tax evasion problem is examined and the factors underlying the tax evasion decision are discussed in light of theoretical and empirical research. It is argued that economic models of evasion fail to account for empirical findings which suggest the importance of non-maximizing behavior and social norms of compliance. A simple model of tax evasion which incorporates these concepts is discussed. Finally, implications for future research and for tax administration and policy are suggested.