The crisis and tax evasion in Greece What are the distributional implications?. Manos Matsaganis, Chrysa Leventi & Maria Flevotomou 2 nd Microsimulation Research Workshop Bucharest, 11 October 2012. the paper. i ntroduction methodology and data results - discussion conclusion.
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Manos Matsaganis, ChrysaLeventi & Maria Flevotomou
2nd Microsimulation Research Workshop
Bucharest, 11 October 2012
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1. Macroeconomic approach: use of macroeconomic indicators
2. Microeconomic approach:use of microeconomic data
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1. A large panel data sample of income tax returns filed in 2007-2011 (incomes earned in 2006-2010)
2. EU-SILC 2007 (incomes earned in 2006)
1. Create comparable reference populations
(i.e. restrictive set of rules for filing a tax return)
2. Create comparable income variables
3. Allocate the reference population into 16 categories defined as combinations of 4 macro-regions and 4 income sources:
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4. Create adjustment factors: ai,j= ỸRi,j/ ỸTi,j where:
ỸRi,j= average income from source j by people in region i in tax returns
ỸTi,j= average income from source j by people in region i in EU-SILC
5. Use these factors for the estimation of a ‘synthetic’ (i.e. adjusted for under-reporting) EU-SILC income distribution
rates of income under-reporting by category
6. Use EUROMOD to calculate tax liability and disposable income based on the original and the ‘synthetic’ EU-SILC income distributions
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Note: mean incomes/taxes are non-equivalised annual personal incomes/taxes in €. They are constructed excluding those earning zero or negative incomes/ paying zero tax. Actual total income tax receipts in 2006 were €8,318 million. The share of positive income earners paying non zero tax is 40.3% under full compliance and 34.4% under tax evasion.
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Note: poverty and inequality indices are computed on the basis of equivalised household disposable income (HDI). The poverty line is set at 60% of median equivalised HDI.
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Note: tax progressivity indices are computed on the basis of equivalised HDI. In the absence of any re-ranking of individuals pre and post-tax, the two indices are proportional.
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