Eliminating tax evasion in Greece could cut deficit by a third

I just saw Adair Morse of U Chicago present a recent working paper on tax evasion in Greece that has been getting a lot of attention (e.g. Economist). She shows that banks give loans with payment amounts that exceed reported income and uses the amount banks lend people to back out how much actual income they have.

The totals are huge. They estimate a lower bound of 28 billion euros of unreported income. The foregone tax revenue from this could cut the 2008 deficit in half and the 2009 deficit by a third.

The worst offenders are the professional class: doctors, engineers, private tutors, accountants, financial service agents and lawyers. These occupations tend to have smaller paper trails and represent a substantial portion of parliament relative to the population and relative to comparable countries.

Advertisements

About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
This entry was posted in Uncategorized and tagged , , , . Bookmark the permalink.

One Response to Eliminating tax evasion in Greece could cut deficit by a third

  1. Matt Zidar says:

    Then what do you suppose would happen if we created incentives/disincentives for all of the offshore US equity that is sheltered? Have you found any studies on that?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s