Original title: The effect of low corporate tax rate on payroll tax evasion
Authors: Madzharova, Boryana
Document type: Research reports
Year: 2011
Language: eng
Series: CERGE-EI Working Paper Series, volume: 448
Abstract: It is a commonly held view that the widespread policy of cutting the corporate income tax has a positive effect on taxable income through decreasing firms' incentive to hide profits. A neglected side of this policy, however, is its potential to trigger more evasion in other tax bases, such as the social security base, especially if the corporate income tax rate is low compared to the payroll rate. We develop a model in which employers and employees cooperate in declaring lower wages to the tax authorities in order to evade payroll contributions.
Keywords: corporate tax; evasion; payroll tax
Project no.: CEZ:AV0Z70850503 (CEP), LC542 (CEP)
Funding provider: GA MŠk

Institution: Economics Institute AS ČR (web)
Document availability information: Fulltext is available at external website.
External URL: http://www.cerge-ei.cz/pdf/wp/Wp448.pdf
Original record: http://hdl.handle.net/11104/0202436

Permalink: http://www.nusl.cz/ntk/nusl-79544


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