Missing miles: Evasion responses to car taxes

Jarkko Harju; Tuomas Kosonen; Joel Slemrod

doi:10.1016/j.jpubeco.2019.104108

Missing miles: Evasion responses to car taxes

Jarkko Harju
, Tuomas Kosonen^*
, Joel Slemrod

^*Tämän työn vastaava kirjoittaja

Tutkimustuotos: Artikkeli › Tieteellinen › vertaisarvioitu

6 Sitaatiot (Scopus)

Abstrakti

We study a tax evasion response to car taxes in Finland, where used car importers overstate the mileage to reduce tax liability. First, we develop a tax evasion measure by comparing reported mileage upon import with subsequent information from vehicle inspections, and find that a decline in mileage — “missing miles” — occurs frequently. Second, we analyze a tax rate increase, and observe a reduction in the number of imported used cars, but only among non-evaders. Finally, we analyze an RCT informing some potential importers about a program of inspections that uncovers true odometer readings, and the results suggest that third-party reporting reduces evasion.

Alkuperäiskieli	Englanti
Artikkeli	104108
Julkaisu	Journal of Public Economics
Vuosikerta	181
DOI - pysyväislinkit	https://doi.org/10.1016/j.jpubeco.2019.104108
Tila	Julkaistu - tammik. 2020
Julkaistu ulkoisesti	Kyllä
OKM-julkaisutyyppi	A1 Alkuperäisartikkeli tieteellisessä aikakauslehdessä

Rahoitus

We are grateful to the Finnish Customs for providing us with data as well as for co-operating with us in performing the RCT. The RCT is registered in the AEA RCT Registry with the unique identifying number of “AEARCTR-0002591”. We also thank the Finnish Transport and Safety Agency for providing us with data, and the Academy of Finland (grant no. 277287 and no. 299373 ) for partially funding the project. Harju gratefully acknowledges funding from the Foundation for Economic Education . Furthermore, we acknowledge the many helpful comments from numerous conferences and seminars. Appendix A

!!ASJC Scopus subject areas

Finance
Economics and Econometrics

Pääsy asiakirjaan

10.1016/j.jpubeco.2019.104108

Siteeraa tätä

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title = "Missing miles: Evasion responses to car taxes",

abstract = "We study a tax evasion response to car taxes in Finland, where used car importers overstate the mileage to reduce tax liability. First, we develop a tax evasion measure by comparing reported mileage upon import with subsequent information from vehicle inspections, and find that a decline in mileage — “missing miles” — occurs frequently. Second, we analyze a tax rate increase, and observe a reduction in the number of imported used cars, but only among non-evaders. Finally, we analyze an RCT informing some potential importers about a program of inspections that uncovers true odometer readings, and the results suggest that third-party reporting reduces evasion.",

keywords = "Car tax, Enforcement measures, Tax evasion",

author = "Jarkko Harju and Tuomas Kosonen and Joel Slemrod",

note = "Funding Information: We are grateful to the Finnish Customs for providing us with data as well as for co-operating with us in performing the RCT. The RCT is registered in the AEA RCT Registry with the unique identifying number of “AEARCTR-0002591”. We also thank the Finnish Transport and Safety Agency for providing us with data, and the Academy of Finland (grant no. 277287 and no. 299373 ) for partially funding the project. Harju gratefully acknowledges funding from the Foundation for Economic Education . Furthermore, we acknowledge the many helpful comments from numerous conferences and seminars. Appendix A Publisher Copyright: {\textcopyright} 2019 Elsevier B.V.",

year = "2020",

month = jan,

doi = "10.1016/j.jpubeco.2019.104108",

language = "English",

volume = "181",

journal = "Journal of Public Economics",

issn = "0047-2727",

publisher = "Elsevier B.V.",

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TY - JOUR

T1 - Missing miles

T2 - Evasion responses to car taxes

AU - Harju, Jarkko

AU - Kosonen, Tuomas

AU - Slemrod, Joel

N1 - Funding Information: We are grateful to the Finnish Customs for providing us with data as well as for co-operating with us in performing the RCT. The RCT is registered in the AEA RCT Registry with the unique identifying number of “AEARCTR-0002591”. We also thank the Finnish Transport and Safety Agency for providing us with data, and the Academy of Finland (grant no. 277287 and no. 299373 ) for partially funding the project. Harju gratefully acknowledges funding from the Foundation for Economic Education . Furthermore, we acknowledge the many helpful comments from numerous conferences and seminars. Appendix A Publisher Copyright: © 2019 Elsevier B.V.

PY - 2020/1

Y1 - 2020/1

N2 - We study a tax evasion response to car taxes in Finland, where used car importers overstate the mileage to reduce tax liability. First, we develop a tax evasion measure by comparing reported mileage upon import with subsequent information from vehicle inspections, and find that a decline in mileage — “missing miles” — occurs frequently. Second, we analyze a tax rate increase, and observe a reduction in the number of imported used cars, but only among non-evaders. Finally, we analyze an RCT informing some potential importers about a program of inspections that uncovers true odometer readings, and the results suggest that third-party reporting reduces evasion.

AB - We study a tax evasion response to car taxes in Finland, where used car importers overstate the mileage to reduce tax liability. First, we develop a tax evasion measure by comparing reported mileage upon import with subsequent information from vehicle inspections, and find that a decline in mileage — “missing miles” — occurs frequently. Second, we analyze a tax rate increase, and observe a reduction in the number of imported used cars, but only among non-evaders. Finally, we analyze an RCT informing some potential importers about a program of inspections that uncovers true odometer readings, and the results suggest that third-party reporting reduces evasion.

KW - Car tax

KW - Enforcement measures

KW - Tax evasion

U2 - 10.1016/j.jpubeco.2019.104108

DO - 10.1016/j.jpubeco.2019.104108

M3 - Article

AN - SCOPUS:85076863060

SN - 0047-2727

VL - 181

JO - Journal of Public Economics

JF - Journal of Public Economics

M1 - 104108

ER -

Missing miles: Evasion responses to car taxes

Abstrakti

Rahoitus

!!ASJC Scopus subject areas

Pääsy asiakirjaan

Sormenjälki

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