Prof. Basil Dalamagas

 

A Dynamic Approach to tax evasion
Public Finance Review, 2010, forthcoming
----------------------------------

Abstract

Standard models of tax evasion use a static decision-under-uncertainty setting to determine how an individual’s evasion decision is affected by the fiscal instruments. Most of these models fail to create a framework, within which unique relationships between tax evasion and its main determinants (especially tax rates and actual income) could be derived. The purpose of this paper is to establish a new pattern of unambiguous relationships in the evasion theory, by shifting the emphasis from the comparative static analysis of previous studies to a comparative- dynamics framework in the context of a neoclassical growth model, in which time and the average burden from all kinds of taxes also play an important role in affecting the taxpayer’s decision making process. 

 

Personal Income Tax: Incentive or Disincentive to Work Effort?
Revue Economique, vol. 59(4), July 2008
----------------------------------------
Abstract

This paper investigates the implications of an exogenous increase (decrease) in the income tax schedule for hours worked per employee and per self-employed in a general equilibrium model. The model is estimated for France, Italy, Spain and Portugal using the GMM estimation technique. Steady-state analysis and econometric estimates show that tax withholding provisions diversify the response of employees and the self-employed to adjustments in the direct tax system. Among the results is that, in the presence (absence) of tax withholding provisions, the labor supply curve may become downward (upward) sloping. Thus, the argument advanced by those who advocate the implementation of a strategy aiming at reducing taxes on labor in order to increase incentives to work need to be carefully reconsidered.