The Theory of Tax Evasion: A Retrospective View

2005/12/01 by Agnar Sandmo · 616 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Comparative statics #Corporate Taxation and Avoidance #Economics #Evasion (ethics) #Financial economics #Fiscal Policy and Economic Growth #Indirect tax #Microeconomics #Portfolio #Public economics #State income tax #Tax basis #Tax evasion #Tax incidence #Tax reform #Taxation and Compliance Studies

paper · open access · doi:10.17310/ntj.2005.4.02

published in National Tax Journal 58(4), 643-663 (University of Chicago Press)

openalex publication_date 2005/12/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/02

Abstract

The paper gives an overview of some main themes in the theory of tax evasion, starting from Allingham and Sandmo (1972). It reviews the comparative statics of the original model of individual behavior where the tax evasion decision is analogous to portfolio choice, and its extensions to incorporate socially conscious behavior, participation in the black labor market and tax evasion by firms. It also discusses the analysis of tax incidence and the problems involved in moving from individual to aggregate analysis. Finally, it reviews the issues that arise in formulating models of optimal taxation in the presence of tax evasion.

Citations

• Shadow Economies: Size, Causes, and Consequences

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