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Economic and Political Determinants of Tax Amnesties in the U.S. States
Author:
Mr. Eric Le Borgnenull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 222
Language:
English
Publication Date:
01 Oct 2006
DOI:
https://doi.org/10.5089/9781451864823.001
ISBN:
9781451864823
ISSN:
1018-5941
Pages:
13
Keywords:
WP; tax amnesty; tax amnesty program; amnesty; tax
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2006: Issue 222