Tax Evasion and Inequality
Gabriel Zucman (UC Berkeley and NBER), Annette Alstadsæter (Norwegian University of Life Sciences), Niels Johannesen (University of Copenhagen and CEBI)
October 23, 2018
Abstract
Drawing on a unique dataset of leaked customer lists from offshore financial institutions matched to administrative wealth records in Scandinavia, we show that offshore tax evasion is highly concentrated among the rich. The skewed distribution of offshore wealth implieshigh rates of tax evasion at the top: we find that the 0.01% richest households evade about25% of their taxes. By contrast, tax evasion detected in stratified random tax audits isless than 5% throughout the distribution. Top wealth shares increase substantially whenaccounting for unreported assets, highlighting the importance of factoring in tax evasionto properly measure inequality .