Niels Johannesen in American Economic Review
The paper "Tax Evasion and Inequality" written with Annette Alstadsæter and Gabriel Zucman has been accepted for publication in American Economic Review.
Summary
Drawing on a unique dataset of leaked customer lists from offshore financial institutions matched to administrative wealth records in Scandinavia, we show that offshore tax evasion is highly concentrated among the rich. The skewed distribution of offshore wealth implies high rates of tax evasion at the top: we find that the 0.01% richest households evade about 25% of their taxes. By contrast, tax evasion detected in stratified random tax audits is less than 5% throughout the distribution. Top wealth shares increase substantially when accounting for unreported assets, highlighting the importance of factoring in tax evasion to properly measure inequality.