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How to get round tax evasion. (preventing tax evasion) (Column)
- Article from:
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The Economist (US)
- Article date:
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May 28, 1994
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Copyright informationCOPYRIGHT 1994 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Tax evasion would diminish if tax rates were lower and if tax law and regulations were less complicated. Such reforms would reduce the incentive to cheat. Methods many countries use to directly attack tax evasion are ineffective.
TAX evasion takes many forms. The handyman who does a job for a lower price if he is paid in cash; the businessman who passes off a holiday as a business trip; the tourist who sneaks an extra bottle of whisky through customs: all are fiddling the state.
By its nature, nobody knows how much tax dodging goes on. The best guesses, though, suggest plenty. America's Internal Revenue Service is reckoned to have been $127 billion short (2% of GDP) in 1992-- ...