تصاعد مالیات، توزیع درآمد و عدم پایبندی مالیاتی

This article examines the determinants of tax non-compliance when we recognise the existence of an imperfectly competitive “tax advice” industry supplying schemes which help taxpayers reduce their tax liability. We apply a traditional industrial organisation framework to model the behaviour of this industry. This tells us that an important factor determining the equilibrium price and hence, the level of non-compliance, is the convexity of the demand schedule. We show that in this context, this convexity is affected by the distribution of pre-tax income, the progressivity of the tax-schedule and the way in which monitoring and penalties vary with income. It is shown that lower pre-tax income inequality as well as a less progressive tax code may cause more tax minimisation activities. Therefore, the frequently advocated policy of reducing the highest tax rate may fail as a policy directed at improving tax discipline. One way of offsetting the possible harm to tax compliance from a less progressive tax could be an adjustment of the penalty and monitoring functions.

Tax non-compliance—avoidance and evasion—is a problem of great importance for many countries. For example, the US Internal Revenue Service estimated that about 17% of due income taxes are not paid (IRS, 2007), while according to the HM-Treasury report (HMRC, 2007), the VAT gap is about 14.2% in the UK. Tax non-compliance does not only reduce tax revenue (ceteris paribus) but also has a number of other welfare-reducing consequences.2 • The loss of tax revenue means that governments either have to spend less on desirable publicly provided goods and services or else are forced to increase the tax burdens on compliant tax payers, thus amplifying the deadweight loss.3 • The government's inability to collect sufficient tax revenue may result in a higher deficit and a deterioration of the financial environment. In extreme cases, it may cause financial crises, as in Russia in 1998 a1nd Argentina in 2002. • Significant amounts of real resources are devoted to both devising tax reducing schemes and to the monitoring and enforcement of tax compliance. • Non-compliance typically results in otherwise identical taxpayers facing arbitrarily different effective marginal tax rates—which violates a standard condition of efficient taxation and thus increases the distortions of the tax system. • Since rich individuals are probably more likely to employ avoidance practices,4 the government levies heavier taxes on those who are less well-off, which will not only increase vertical inequality but may also slow down the development of small businesses and economic growth. • It is also important to recognise that non-compliance can have a multiplier effect to the extent that non-compliance by a small group of individuals diminishes the social norm of tax compliance in the wider population of otherwise compliant taxpayers. The importance of such norms has been emphasised in a number of behavioural and experimental studies (Gordon, 1989, Cowell, 1992, Myles and Naylor, 1996 and Kim, 2003). While it is thus important to more fully understand the drivers of tax non-compliance, much of the literature has focused on taxpayer behaviour—the demand side of non-compliance—using either the conventional Allingham–Sandmo model or some other decision-theoretic approach. It is now generally recognised that non-compliance has both a supply side and a demand side, and that more attention needs to be paid to the supply side. Indeed, Slemrod (2004) considers the ignorance of the supply side of tax non-compliance to be a significant shortcoming of traditional economic models, especially in relation to corporate tax behaviour, and points out that the market for tax abusive schemes has grown substantially in recent years.5 One aspect of the supply side that has been widely studied is the role of agents/tax preparers who may inform the clients of tax saving opportunities. For example, Erard (1993) shows that the non-compliance on returns prepared by certified public accountant and lawyers is approximately 4.5 times larger than it would have been had their clients prepared their own tax returns. Another aspect focuses on how taxes could be evaded by bribing the tax inspector6 or even a member of parliament to issue the right tax exemption.7 In this paper, the focus is on another aspect of supply—the existence of an imperfectly competitive industry that devises and sells tax minimisation schemes. Certainly, in many advanced economies, the market seems to be dominated by a relatively small number of large players. For instance, in the UK, this would be the “Big Four” accountancy firms (KPMG, Ernst and Young, PricewaterhouseCoopers and Deloitte), which often face criticism for the provision of tax shelters for wealthy individuals and business corporations (see, for example, The Financial Times, May 10, 2004). Within such a perspective, a crucial factor determining the amount of non-compliance is the equilibrium price for these schemes. Now, it is well known from the traditional Industrial Organization literature that the equilibrium price depends on certain features of the industry demand curve. For example, Anderson and Régis (2003) show that the more convex is the industry demand function, the lower will be the equilibrium price and the higher the equilibrium quantity. Similarly, Sandmo (1971) and Coes (1977) have shown that the supplier reduces the quantity when facing higher uncertainty/inequality in demand. The aim of this paper is to explore what factors affect the shape of the demand curve for the tax minimisation industry and hence, the equilibrium price and output. We will investigate how the shape of the demand curve depends on (i) the progressivity of the tax schedule; (ii) the level of inequality of the pre-tax distribution of income; (iii) the shape of penalty and monitoring functions. A number of important implications will be discussed. • One of the most important issues is that in a wide class of cases, a greater progressivity of the tax schedule may reduce the supply of tax avoidance/evasion schemes. Conversely, the flatter the schedule, the lower is the equilibrium price of tax minimisation schemes and hence, the greater is the level of non-compliance. This result is very important because the presumption is often the other way around—the response to avoidance/evasion is to have a very flat schedule (see, for example, Tanzi and Zee, 2000). • In a wide class of cases, there will be greater tax compliance in economies with a higher level of inequality in pre-tax income. • Finally, we will show how, given the tax code and pre-tax income distribution, the government can influence the shape of the demand curve for tax evasion and hence, the proportion of non-compliant taxpayers by suitably designing the shape of the monitoring and penalty functions. The intuition behind these first two results is the following. The more equal are tax duties—which can arise by having either a more progressive tax schedule or a more equal distribution of pre-tax income—the more elastic is demand and thus, the greater is the incentive of suppliers of tax schemes to cut prices to attract a larger share of the population to buy their tax scheme. Conversely, the more unequal are tax duties, the more can be gained by targeting the rich (or those who are ready to pay much more) at a higher price. We will show that the main results are robust to different assumptions about the nature of market structure. The rest of the paper is organised as follows. Section 2 presents a general model and characterises the equilibrium price and output of tax reduction schemes. Section 3 derives the main comparative static results and, in particular, the link between tax compliance and both the progressivity of the tax schedule and the degree of income inequality. Section 4 considers two extensions of the previous analysis: first we show how a tax authority can influence the level of compliance through the design of its monitoring and penalty regimes and second we show how the analysis can be generalised to different forms of payment schedules. Section 5 concludes the paper.

In this paper, we have modelled the tax advice industry which adjusts the supply of tax reduction schemes in response to changes in aggregate demand. Within this model, we have shown how levels of compliance respond to a number of factors including the progressivity of the tax schedule and the distribution of taxable income. We have shown that it is extremely important to take this endogenous supply into account since it produces conclusions that run counter to much of the existing literature, but can also help explain phenomena that are otherwise hard to explain with existing models. For example, we have argued that a reduction in inequality or a decrease in tax progressiveness may result in a fall of the share of compliant taxpayers. Further, we have provided arguments against the reduction in the highest marginal tax rate as a policy directed at improving tax discipline. We have also shown that when the government is reluctant to impose a more progressive tax code, it can still make tax evasion demand less equally distributed by designing a proper audit and punishment function. Finally, we have shown that our results are robust to the assumption on market structure, since they have been proved for Cournot game quantity competition with conjectural variation and a bargaining model with a reserve price. A significant limitation of the model is the assumption that there is just one type of tax scheme. Ulph (2009) extends the model to the case with many tax schemes ranging from tax planning through tax avoidance to tax evasion, each with very different risk profiles and expected payoffs. However, in his model, there is perfect competition so prices are exogenous and determined by costs