Economic and Political Determinants of Tax Amnesties in the U.S. States

October 1, 2006

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Format: Chicago

Eric Le Borgne. Economic and Political Determinants of Tax Amnesties in the U.S. States, (USA: International Monetary Fund, 2006) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper revisits earlier studies on the determinants of tax amnesties. The novel findings are (i) amnesties are more likely to be declared during fiscal stress periods, and (ii) political factors significantly affect the introduction and timing of amnesties. In particular, the paper empirically disentangles opposite theoretical effects to show that governors perceive amnesties as another revenue source (rather than a tax increase alternative). Finally, supporting evidence shows that by breaking horizontal equity, amnesties might be perceived as unfair: a significant correlation exists between governors who lost their reelection bids and the introduction of a tax amnesty during their election years.

Subject: Fiscal risks, Revenue administration, Subnational tax, Tax equity

Keywords: Amnesty, Tax, Tax amnesty, Tax amnesty program, WP

Publication Details

Pages:

13
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/222
Stock No:

WPIEA2006222
ISBN:

9781451864823
ISSN:

1018-5941

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