This study is currently not recruiting participants.

Tax incidence and evasion

Investigating Tax Shifting and Tax Evasion

Not Recruiting
100 years or below
All
Phase N/A

Brief description of study.

A well-known result in the field of public finance is that a tax that is imposed on sellers will be shifted, at least partially, to the buyers of the taxed good. The standard micro-economic theory of taxation makes two predictions about how much of the tax will be shifted to buyers. First, the amount of the tax that is shifted to buyers is relatively low if buyers are relatively more responsiveness to price changes than sellers. Second, the amount of the tax that is borne by the buyers is the same as if the tax were imposed on buyers. This latter result is referred to as tax equivalence. The purpose of this project is to determine if these theoretical predictions hold in the presence of tax evasion.

Detailed description of study

A well-known result in the field of public finance is that a tax that is imposed on sellers will be shifted, at least partially, to the buyers of the taxed good. The standard micro-economic theory of taxation makes two predictions about how much of the tax will be shifted to buyers. First, the amount of the tax that is shifted to buyers is relatively low if buyers are relatively more responsiveness to price changes than sellers. Second, the amount of the tax that is borne by the buyers is the same as if the tax were imposed on buyers. This latter result is referred to as tax equivalence. The purpose of this project is to determine if these theoretical predictions hold in the presence of tax evasion.

Eligibility of study

You may be eligible for this study if you meet the following criteria:

  • Conditions: healthy
  • Age: 100 years or below
  • Gender: All

This study investigates how taxes imposed on sellers affect buyers, especially when tax evasion is present. In public finance, it's known that when sellers are taxed, some of this tax is passed on to buyers. This study aims to see if this still holds true when tax evasion occurs.

Participants in the study will be involved in procedures that assess their responsiveness to price changes and how taxes are shifted in different scenarios. The study will also consider the concept of tax equivalence, which suggests that the burden of tax is the same whether it's imposed on buyers or sellers.

  • Who can participate: Participants must be individuals involved in buying or selling goods where taxes are applied. They should have experience with price changes and tax situations. Age criteria may apply.
  • Study details: Participants will engage in activities that simulate buying and selling scenarios with taxes. The study may involve a placebo, which is an inactive setup that mimics real tax conditions without actual financial transactions. A placebo is an inactive substance that looks like the investigational medicine/vaccine but does not contain any medicine.
Updated on 19 Feb 2024. Study ID: 1804166923

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