Is tax evasion distributed differently by income level? How do you control for it just being more complicated to file as income increases? My experience in the lower rungs is that middle class people pay taxes faithfully out of great fear of consequences for not doing so, while lower income and poor friends often cheat or don’t bother with taxes at all (or bank accounts for that matter). I’ve met and known tax cheats but none of them white color workers. I would love to see data. I would predict a u shape, with tax evasion lowest in the middle, and higher for both low income blue color workers (including waitresses), and higher for the upper classes and those who own homes, other major wealth.
>My experience in the lower rungs is that middle class people pay taxes faithfully out of great fear of consequences for not doing so
It's also pretty hard not to pay taxes if you're getting most of your income through employment, since your employer is obligated to withhold your taxes on behalf of the state.
This seems broadly accurate, in the sense that middle class wage earners cheat on taxes the least, and have the least ability to. Lower income workers don't cheat out of much taxes either, because they don't have much money and don't get taxed much, but it's widespread for the under the table or cash economy of course. Which yes, leaves consequential tax evasion as mostly the province of the more well off, where it is rampant.
I would think, at least for under the table cash transactions, that it would be more lower income, not higher. That includes the fly by night electrician who will install a new outlet for you as long as you don’t need it certified, cash only, the guy also lives out of his truck. Or is consequential excluding those cases?
Yes it's widespread and frequent among the lower income classes for the reasons you mention. But it's a whole lot less money than tax evasion by the wealthy, for obvious reasons.
I’m not sure, probably. But they are usually skipping out on not only income tax, but self employment taxes. I have to say I don’t find myself bothered by it as much as tax evasion.
I would hazard a guess that the amount of taxes avoided by the top 10% of wealthy in the United States is larger than the actual total income of the bottom 10%.
Avoidance isn’t illegal, however, so I’m not sure why it would count. I’m pretty sure evasion in the top 10% is pretty low, just because they have better accountants and wouldn’t take the risk.
I’m not sure. I do know that until some of Biden’s changes, identifying tax evasion in the lower classes was hardly possible. The only evasion cases worth identifying were those that could pay enough to help fund the expensive prosecution of such crimes. Now, with greater government power over bank accounts (the 600 dollar rule), we should have better ability to measure tax evasion in the lower classes even though we won’t prosecute it yet.
