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12:30 - 13:45 14 March 2012

Social networks and dynamics of tax avoidance: Evidence from a well-defined Norwegian tax shelter

Location

IFS Seminar Room | Institute for Fiscal Studies (link Map)
7 Ridgmount Street | London | WC1E 7AE |

Open to: Academic | Student
Ticketing: Open

Speaker information

Wojciech Kopczuk, Columbia

In 2005, over 8% of Norwegian shareholders transferred their shares to new (legal) tax shelters intended to defer taxation of capital gains and dividends that would otherwise be taxable in the aftermath of 2006 reform. We document dynamics of this process and its determinants. Using detailed administrative data we identify family, shareholder and other types of social networks and describe how take up of tax avoidance progresses within a network. A feature of the reform was that the ability to set up a tax shelter changed discontinuously with individual shareholding of a firm and we use this fact to estimate the causal effect of availability of tax avoidance for a taxpayer on tax avoidance by others in the network. We find that take up in a social network increases the likelihood that others will take up.


Contact

Institute for Fiscal Studies
020 7291 4800 |


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