The Economic Analysis Of Tax Evasion, Tax Avoidance And Their Effects

Tax evasion and tax avoidance are two kinds of measures that are usually taken bytaxpayers to reduce their tax burden. Recently, the problem of tax evasion has becomemore and more serious, tax avoidance has sprung up, tax evasion and tax avoidance hasbecome the focus of the whole society. In order to help the revenue authority to dealproperly with the problem of tax evasion and tax avoidance, this dissertation has analyzedthe affecting factors of tax evasion and tax avoidance, and has analyzed their effects oneconomy systematically from the point of view of theory and practice, which is veryimportant theoretically and practically to disclose the inner laws of tax evasion and taxavoidance, reinforce anti-tax avoidance and pretect tax evasion, and to help themacro-policy authorities of tax make decisions scientifically and advance the course oflawful revenue. The basic frame theoretically analysis of tax evasion and its effects was established byAllingham .M.G and Sandmo in 1972. which named maximum predicted utility model. Thedissertation firstly introduced detaily the structure, the comparative static analysis and the conclusion ofthe A-S model. And it also gave some coments on A-S model and research methods and results offoreign typical tax evasion models. Based on these typical foreign tax evasion models, this dissertation has mainlystudied the problem of tax evasion and tax avoidance. Based on using the classical modelsabroad of tax evasion and considering the practice of China, this dissertation has built acomparative static model from the view of economics and psychics. Through comparativestatic analysis, the affecting factors and directions of tax evasion and tax avoidance hasbeen deducted, and a conclusion has been made: if the probability of being ferreted outand punished increases, and the taxpayers' moral culture and diathesis are enhanced, thentax evasion will be restrained and the tax avoidance will be encouraged; the increase of taxrate will stimulate the tax evasion and restrain the tax avoidance of taxpayers; theactivities of tax evasion and tax avoidance are something of opposing. In order to makethe model even more adaptable, this dissertation gives some enlarged explanation of thecharacteristics of model parameters under different conditions: that is the action of taxevasion has the function of self-insurance; if the probability of being detected is thefunction of the hidden income and the tax effect, the conclusion of original comparativestatic model remains the same. To check the degree of coincidence between the theoretical study and realisticeconomic phenomena, and to check the theoretical analysis conclusion and dissertationusing empirical data, questionnaires have been made to investigate the tax evasion and taxavoidance phenomena and their affecting factors, and also calculate the relativecoefficients of tax evasion and tax avoidance and their affecting factors. The intension isto indicate the said relationship (tax evasion and tax avoidance and affecting factors)from IIIthe view of taxpayers. And check the dissertation theoretical conclusion, the empiricalstudy supports the conclusion:tax-paid intention was decided by taxpayer's diathesis, thenaffect the taxpayer's diathesis is the good way of legal tax evasion and tax avoidance andrestrain illegal taxpayer's behavior of tax evasion, the larger percentage of taxed revenuewill decrease the percent of tax paid and stimulate the behavior of tax evasion, higherprobability of being detected and punishment will restrain the tax evasion ;the tax effortwill directly affect the effect of the tax avoidance, the higher the cost, the lower thepercentage between the tax-paid revenue and actual revenue, the better the result of the taxevasion and tax avoidance. As a result, the taxpayer should pay more attention to taxavoidance. The conclusion made is consistent with the prior conclusion ma...