| Sign In to gain access to subscriptions and/or personal tools. |
Understanding Spatial Variation in Tax Sheltering: The Role of Demographics, Ideology, and TaxesWilliams College, Williamstown, Massachusetts, William.M.Gentry{at}williams.edu
University of California at Los Angeles, mkahn{at}ioe.ucla.edu Taxpayers shelter income from taxation both through illegal evasion and legal avoidance. This tax sheltering creates a difference between a household's actual income and what it reports to the tax authorities. While tax sheltering is a central concern for designing a tax system, the private nature of this behavior complicates evaluating the magnitude and determinants of such behavior. In this article, we combine zip-code level data on reported income from the Internal Revenue Service and the Census Bureau to examine three types of determinants of tax sheltering: (1) tax policy variables, including tax rates (2) political attitudes toward taxation; and (3) demographics. Our estimates suggest that higher tax rates increase the amount of tax sheltering. In terms of political support, our results suggest that places with voters who are either more conservative or less supportive of tax increases actually shelter less income.
Key Words: tax sheltering • elasticity of taxable income • political support for taxation
This version was published on July
1, 2009 International Regional Science Review, Vol. 32, No. 3,
400-423 (2009) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |
|
|
 |
|
Sign In to gain access to subscriptions and/or personal tools.
