Tulane Economics Working Paper Series Corruption, Taxation, and Tax Evasion James Alm Yongzheng Liu Department of Economics School of Finance Tulane University Renmin University of China
[email protected] [email protected] Working Paper 1802 March 2018 Abstract In this paper, we examine the relationships between corruption, taxation, and tax evasion. We examine three specific questions. First, on a general level, what do simple empirical analyses suggest about some of the causes and the consequences of corruption? Second, on a more specific level, what do similar empirical analyses indicate about the relationship between corruption and taxation? Third, on an even more specific level, what is the relationship between corruption, taxation, and tax evasion? We conclude with a discussion of how this evidence can be used to control corruption, making use of a different if related body of work on tax evasion. Keywords: Corruption, tax evasion, behavioral economics, controlled field experiments, laboratory experiments JEL codes: H2, H26, D73 Corruption, taxation, and tax evasion James Alm1 and Yongzheng Liu2 Abstract In this paper, we examine the relationships between corruption, taxation, and tax evasion. We examine three specific questions. First, on a general level, what do simple empirical analyses suggest about some of the causes and the consequences of corruption? Second, on a more specific level, what do similar empirical analyses indicate about the relationship between corruption and taxation? Third, on an even more specific level, what is the relationship between corruption, taxation, and tax evasion? We conclude with a discussion of how this evidence can be used to control corruption, making use of a different if related body of work on tax evasion.