Thursday, October 11, 2012
Ilan Benshalom (Hebrew University, Faculty of Law) presents Taxing Cash at the University of British Columbia today as part of its National Centre for Business Law Speakers Series hosted by David Duff:
Nobody likes to pay taxes, so collecting taxes is never easy. Indeed, when it comes to cash transactions, collection is more difficult because cash enables, or at least significantly simplifies, many tax evasion schemes. The article provides an original proposal that goes beyond the classic paradigm to reduce tax evasion by investing more in audit-based enforcement. While the public finance literature emphasizes the need to deter and detecting tax-evading cash transactions, this Article argues for a tax on the usage of cash (that does not distinguish legitimate from illegitimate tax evasion transactions). Taking behavioral responses into account, the paper argues that taxing cash transactions on a crude fault-free basis could significantly help to minimize the revenue loss, inefficiencies, and inequities of income underreporting (in developed economies).