Thesis On Tax Avoidance

Nonconforming tax avoidance originates from the differences in book and tax rules.

If no such differences existed, all tax avoidance would be conforming.

It also compares how participants react to media biases and if the factors presented affect the participant’s ethical views of tax decisions.

Participants believe that tax avoidance, while legal, is slightly unethical.

The second part uses this finding to examine the effect of tax rates on the resources wasted during the process of tax sheltering and evasion detection.

We model a declaration detection process, where both, tax inspector and taxpayer, can invest into the probability that the true income from different potential income sources is verified We show that in this contest a higher tax rate leads to more resources that are waste- fully invested in the cat and dog play between authority and taxpayer.

To do so, we use a simplified version of the model from part two and allow for sequential auditing as well as for different types of taxpayers.

The possibility to learn something about the type of the taxpayer by auditing sequentially gives the authority a powerful tool to better target its detection effort.

Accounting Kubick, Thomas R, "An empirical investigation of corporate tax avoidance: The firm life-cycle, investor perception and the timeliness of earnings announcements" (2011).

This thesis consists of three extended essays on the evasion of income tax.


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