American Economic Review Vol. 109 No. 6 2019

Tax Evasion and Inequality

Annette Alstadsæter¹; Niels Johannesen²; Gabriel Zucman³

¹ Norwegian University of Life Sciences, School of Economics and Business, Christian Magnus Falsens vei 18, 1433 Ås, Norway (email: ) · ² Department of Economics and CEBI, University of Copenhagen, Øster Farimagsgade 5, 1353 Copenhagen, Denmark (email: ) · ³ University of California, Berkeley, 530 Evans Hall #3880, Berkeley, CA 94720, and NBER (email: )

Abstract

Drawing on a unique dataset of leaked customer lists from offshore financial institutions matched to administrative wealth records in Scandinavia, we show that offshore tax evasion is highly concentrated among the rich. The skewed distribution of offshore wealth implies high rates of tax evasion at the top: we find that the 0.01 percent richest households evade about 25 percent of their taxes. By contrast, tax evasion detected in stratified random tax audits is less than 5 percent throughout the distribution. Top wealth shares increase substantially when accounting for unreported assets, highlighting the importance of factoring in tax evasion to properly measure inequality.

DOI

10.1257/aer.20172043

Volume

109

Issue

6

Pages

2073-2103

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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