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Tax Evasion and Inequality
Report

Tax Evasion and Inequality

Annette Alstadsæter, Niels Johannesen and Gabriel Zucman
University of California, Berkeley, 2017
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Editorial Rating

9

Qualities

  • Analytical
  • Innovative
  • Eye Opening

Recommendation

Politicians decry the inequality gap between the wealthy and the vast majority of income earners. But according to this erudite report by professors Annette Alstadsæter, Niels Johannesen and Gabriel Zucman, one reason the rich are growing richer is tax evasion. The authors uncover substantial evidence, some of it from the leaked Panama Papers, that wealthy individuals are fairly aggressive in their tax evasion schemes. The researchers advise public authorities to target these activities to improve income inequality while rectifying tax revenue imbalances. 

Take-Aways

  • Policy experts are increasingly looking to tax evasion by the wealthy as a fundamental cause of the wealth and income gap.
  • While the rate of tax evasion averages about 3% in Scandinavia, the “ultra-wealthy” there evade taxes at a rate 10 times the average. 
  • The propensity for individuals to dodge tax payments rises in relation to their overall wealth levels.

About the Authors

Annette Alstadsæter is a professor at the Norwegian University of Life Sciences. Niels Johannesen is a professor at the University of Copenhagen. Gabriel Zucman is an assistant professor at the University of California, Berkeley.

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