TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, April 10, 2017

Cullen Presents Political Alignment And Tax Evasion Today At NYU

CullenJulie Berry Cullen (UC-San Diego), presents Political Alignment and Tax Evasion at NYU today as part of its Tax Policy Colloquium Series hosted by Daniel Shaviro and Rosanne Altshuler:

We explore whether the decision to evade federal personal income taxes depends on the taxpayer’s level of approval of government. We first demonstrate using survey data the positive association between political alignment with the current president and the respondent’s trust in the administration and support for government taxation and spending. We then show using IRS tax return data and county-level fixed effects regressions that the larger the typical share of county residents who vote for the president’s party the smaller the tax gap across a variety of tax gap measures. Responses are concentrated in income components that are more likely to be invisible to the government, such as small business income. Our results provide realworld evidence that a positive outlook on government lowers tax evasion.

Figure 3

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Has she adjusted the analysis for the fact that substantial elements of the Democrats' constituency pay little, no, or "negative" taxes? In which case there are no taxes to avoid. Has she adjusted for income level? People who pay the highest taxes have the most incentive to avoid taxes because they pay far more in absolute terms and pay at much higher rates. Recall that Bill Clinton famously deducted the value ($2.00) of used underwear that he donated to charitable groups when Governor of Arkansas, leading him to make no itemized deductions while in the White House. This "study" seems to be for the purpose of providing a talking point for Democratics (not much of one, but nevertheless). Social science is a joke in the universities, mainly because very few "social scientists" have the slightest understanding of the mathematics involved and how they should be interpreted, nor of the criteria for choosing valid data for a statistical study. It would be unfortunate if that spreads to the law schools.

Posted by: T. Montgomery | Apr 11, 2017 8:29:22 PM