A constructive, highly professional relationship between tax authorities and taxpayers is essential for tax compliance. The aim of the present paper was to explore systematically the determinants of this relationship and related tax compliance behaviors based on the extended slippery slope framework. We used in-depth qualitative interviews with 33 self-employed taxpayers and 30 tax auditors. Interviewees described the relationship along the extended slippery slope framework concepts of power and trust. However, also novel sub-categories of power (e.g., setting deadlines) and trust (e.g., personal assistance) were mentioned. Furthermore, also little-studied categories of tax behavior emerged, such as accepting tax behavior, e.g., being available to the tax authorities, or stalling tax behavior, e.g., the intentional creation of complexity. The results comprehensively summarize the determinants of the tax relationship and tax compliance behaviors. Additionally, results highlight future research topics and provide insights for policy strategies.

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本文前段以Barro(1990)一文中的“生產性政府支出”模型為基礎，依次融入定額、比例、線性累進與級距累進四種所得租稅制度。文中除了對各稅制與經濟成長的討論外，對公共資本的在各稅制下的配置問題亦作了探討；除此之外，亦觀察各稅制對原本生產函數的影響，以致在長期時不同的租稅制度下的經濟發展有不同的結果。 本文後段，藉著傳統以個體為出發點租稅逃漏的探討，我們將逃漏租稅及政府偵查的機制放入了模型當中。討論中發現，累進性的租稅除了扭曲資源配置，也妨礙了私人資本的形成，以致經濟漸走下坡；由家戶所得規避的行為，可以讓使用無效率的資源轉供家戶利用，重新恢復經濟的成長。另外，本文亦對政府所得級距精簡的租稅改革措施提供了理論基礎。

Thesis (Ph.D.)--McMaster University, 2006. / Supervisor: Thomas F. Crossley. Includes bibliographical references.

<p>BACKGROUND The economic crimes related to the taxation authorities (SKM), aim at evading paying taxes and/or wrongly obtaining tax revenue. SKM has noticed that many newly established companies have intended to be carried on, only for a short period of time and with the aim of generating grant-revenues and in the meantime omit to pay or wrongly account for taxes. SKM wants to investigate the possibilities to develop a method of analysis to identify those corporations. </p><p>PURPOSE The purpose of this essay is to make a survey of, and identify companies, who fail in their obligations concerning income-tax return and paying taxes and charges and to try to see what is characteristic for those companies in order to find out a method of analysis. Further a study of literature will be done especially concerning who will commit economic crimes and the reasons why they do it. </p><p>REALISATION I have investigated how the 251 corporations which were registered for F-tax at the local tax office of Eastern Gothenburg (SKR) during 1996 have handled their settlements and income-tax returns from the registration1996 until 1998. I have worked with my essay under guidance of Olle Thegerström and I have under observance of the secrecy of the taxation authorities taken part of all information that have been necessary to fulfil this work. </p><p>RESULTS From the variables that I have used in my investigation I don't think that it is possible to develop a method to anticipate which companies who will fail in their obligations to SKM. That is not to say that there are not structures, which can anticipate how a company will develop. I think that it is values of the manager of business, which to a large extent direct how the company will act in different situations. His values influence in their turn a great number of factors. In that case a model would have to consist of unreasonably many variables related to individual performance. Such a model would be practically impossible and according to my opinion unacceptable from an ethical point of view to use in practice.</p>

BACKGROUND The economic crimes related to the taxation authorities (SKM), aim at evading paying taxes and/or wrongly obtaining tax revenue. SKM has noticed that many newly established companies have intended to be carried on, only for a short period of time and with the aim of generating grant-revenues and in the meantime omit to pay or wrongly account for taxes. SKM wants to investigate the possibilities to develop a method of analysis to identify those corporations. PURPOSE The purpose of this essay is to make a survey of, and identify companies, who fail in their obligations concerning income-tax return and paying taxes and charges and to try to see what is characteristic for those companies in order to find out a method of analysis. Further a study of literature will be done especially concerning who will commit economic crimes and the reasons why they do it. REALISATION I have investigated how the 251 corporations which were registered for F-tax at the local tax office of Eastern Gothenburg (SKR) during 1996 have handled their settlements and income-tax returns from the registration1996 until 1998. I have worked with my essay under guidance of Olle Thegerström and I have under observance of the secrecy of the taxation authorities taken part of all information that have been necessary to fulfil this work. RESULTS From the variables that I have used in my investigation I don't think that it is possible to develop a method to anticipate which companies who will fail in their obligations to SKM. That is not to say that there are not structures, which can anticipate how a company will develop. I think that it is values of the manager of business, which to a large extent direct how the company will act in different situations. His values influence in their turn a great number of factors. In that case a model would have to consist of unreasonably many variables related to individual performance. Such a model would be practically impossible and according to my opinion unacceptable from an ethical point of view to use in practice.

The dissertation aims at broadening our understanding of tax evasion and government spending in developing countries. It comprises three essays. The first essay deals with estimation of tax evasion in a cross-section of developing countries by estimating their underground economies using the currency demand method. By including enforcement parameters of the tax authorities as another factor of tax evasion in the currency demand equation, it presents theory-consistent tax evasion measurement. Our estimation strategy includes the use of the Arellano-Bond dynamic panel data method that is suitable for correcting the endogeneity problem in the currency demand estimation. The study finds substantial underground economy in developing countries, ranging from 2-67 percent of GDP. The second essay is concerned with time series measurement of the underground economy in South Africa using the currency demand method. Unlike other similar studies on South Africa, it gives sufficient attention to the unit root problem that is common in time series analysis of the currency demand method. Using the Error Correction Method (ECM), it investigates the relationship between the tax rate and the currency demand, and presents yearly estimates of the underground economy for the period 1965-2002. The third essay deals with the behavior of government spending in South Africa for the period 1960-2002. Since South Africa went through various political and macroeconomic shocks during this period, we augment measures of these shocks to the standard median voter model to assess the determinants of government spending in South Africa. Using the Error Correction Method (ECM), we investigate the long-run and short-run behavior of government spending. We find that, in addition to the tax share and the income of the median voter, macroeconomic and political shocks were also significant factors in determining government spending in South Africa. This study broadens our understanding of the behavior of government spending in the presence of political and macroeconomic shocks that are common in small open developing economies.

This dissertation comprises two essays that attempt to determine, empirically, the relationship between personal income taxation and income inequality. The first essay examines whether income inequality is affected by the structural progressivity of national income tax systems. Using detailed personal income tax schedules for a large panel of countries, we develop and estimate comprehensive, time-varying measures of structural progressivity of national income tax systems over the 1981–2005 period. Our findings suggest that progressivity has a strong negative effect on inequality in reported gross and net income and that this negative effect is strongest in countries whose institutional framework supports pro-poor redistribution. However, the effect of progressivity on true inequality, which is approximated by consumption-based measures of the GINI coefficient, is significantly smaller. The second essay relies on household level data and complements the first in its empirical approach. We simulate the distributional impact of the Russian personal income tax (PIT) following the flat tax reform of 2001 using data from the Russian Longitudinal Monitoring Survey. We use a series of counterfactuals to decompose the change in the distribution of net income into a direct (tax) effect and an indirect behavioral effect. As expected, the direct tax effect increased net income inequality. Changes in the pre-tax distribution, on the other hand, had a large negative impact on inequality thus leading to an overall decline in net income inequality. We also find that the tax-induced evasion response increased reported net income inequality while reducing consumption based measures of net income inequality.

Over the past decade, the European Union has been characterized by an explosion of expenditure, insufficient revenue, high deficits and a lack of budget discipline. Financial markets in Europe are currently dealing with enormous government debts, poor government balance sheets and a weakening banking system. The purpose of this paper is to investigate the origins of the current Euro-crisis and specifically identify the extent to which it will affect the nation of Italy going forward. To understand Italy's stance amid the Euro-crisis, we proceed as follows: First, a historical background section will develop the fundamental issues that have developed in Europe over time leading to the current situation. Next, a discussion about Italian economics and politics will identify Italy's central policy issues placed in the context of the Euro-crisis. Subsequently, Italy's issues with tax evasion will be covered illustrating its history and enforcement addendums going forward. The final section of this paper will present a forward-looking prediction about the fate of Italy and the Euro-zone and will include some of the necessary steps toward avoiding an international economic collapse.

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