This paper investigates the effect of CFO gender on corporate tax aggressiveness. Focusing on firms that experience a male-to-female CFO transition, the paper compares those firms’ degree of tax aggressiveness during the preand posttransition periods. Using the probability of tax sheltering, the predicted unrecognized tax benefits, and the discretionary permanent book-tax differences to measure...

We investigate the role of externalities in tax evasion arising from congestion of the auditing resources available to local tax authorities. The empirical analysis employs a novel method due to Graham (2008) that mitigates most of the problems that surround the identification of endogenous social effects [Manski (1993)]. Identification exploits the information contained in the variance of conc...

The Beckerian approach to tax compliance examines how a tax authority can maximize social welfare by trading-off audit probability against the fine rate on undeclared tax. This paper offers an alternative examination of the privately optimal behavior of a tax authority tasked by government to maximize expected revenue. The tax authority is able to trade-off audit probability against audit effec...

Based on first-hand account, this paper offers evidence on price setting and price adjustment mechanisms that were illegally employed under the Soviet planning and rationing regime. The evidence is anecdotal, and is based on personal experience during the years 1960–1971 in the Republic of Georgia. The description of the social organization of the black markets and other illegal economic activi...

Although tax withholding is a central component of the US income tax system, there is a paucity of research that explores the relationship between tax withholding and subsequent tax reporting. Using a framed field experiment with working adults and deliberate framing, this study looks directly at this nexus. Briefly, we find interesting asymmetries related to tax position, in particular that ta...

When resources are divided among agents, the characteristics of the agents are taken into consideration. A simple example is the bankruptcy problem, where the liquidation value of a bankrupt firm is divided among the creditors based on their claims. We characterize division rules under which no group of agents can increase the total amount they receive by transferring their characteristics with...

Laws express rules of conduct (‘obligations’) enforced by the means of penalties and rewards (‘incentives’). The role of incentives in shaping individual behaviour has been largely analysed in the traditional economic literature. On the contrary, very little is known about the specific role of obligations. In this paper we test whether or not obligations have any independent effect on cooperati...

Tax Evasion and Social Interactions The paper extends the standard tax evasion model by allowing for social interactions. In Manski’s (1993) nomenclature, our model takes into account social conformity effects (i.e., endogenous interactions), fairness effects (i.e., exogenous interactions) and sorting effects (i.e., correlated effects). Our model is tested using experimental data. Participants ...

This paper models a capital-exporting country that encounters difficulties in taxing foreignsource income, due to tax evasion problems. The paper compares the country’s optimal effective tax rates on the income from capital invested at home and abroad (including penalties levied on detected tax evaders). It finds that tax evasion abroad does not provide a justification for a relatively low effe...

An endogenous growth model is examined where individuals optimize consumption and tax evasion over time given the tax structure and tax compliance policy of the government. Applying methods of stochastic optimal control, the individual’s problem is solved and the rate of economic growth is derived. It is shown that for a given tax policy tax evasion spurs growth because it leads to higher savin...