Economic Crime (From Economic Crime, P 73-82, 1985, Dan Magnusson, ed. - See NCJ-98626)

• NCJ Number: 98628
• Author(s): S Strom
• Date Published: 1985
• Length: 10 pages
• Sale Source: National Institute of Justice/; Liber Distribution Foerlagsorder; NCJRS Photocopy Services
• Publication Type: Report (Study/Research)
• Language: English
• Country: United States of America
• Note: Available on microfiche as NCJ-98628.

Annotation

This article examines the classifications of economic crime, the extent of the shadow economy, motivations for economic crime, and the impact of key variables on tax evasion.

Abstract

There are two broad categories of economic crime: production and distribution of illegal goods and services (e.g., prostitution, gambling, narcotics); and tax evasion by wage earners, the self-employed, and companies. While estimates of the size of the shadow economy suggest that it represents a small economic problem, such estimates fail to account for the associated costs of enforcement activities, lost tax revenues, and the increased uncertainty surrounding the normal economy and the effects of this uncertainty. A 1983 survey of participation in the shadow economy and tax evasion among Norwegian adults indicates that tax rates, perceived probability of detection, employment of both spouses, and sociodemographic variables influenced both participation in the shadow economy and tax evasion. These results suggest that the optimal strategy for controlling tax evasion will require lower tax rates and the implementation of measures to increase the perceived probability of detection. Further research is needed to improve understanding of the behavior of tax evaders, particularly in the area of systematic behavioral studies using a conditional statistical framework for data analysis. Eight references are provided.