S2E7: The tax gap: How do we measure it, and what does it mean?
Update: 2024-05-08
Description
The US Bureau of Economic Analysis estimates that in 2018, little more than a third of business income wasn't reported in tax filings. That's roughly $700 billion. Policymakers have long railed against the tax gap with little success. Economist Ellen McGrattan lays out a dynamic theory of business taxation, and she uses the framework to tease out the impact of two potential reforms, higher business taxes, and greater tax enforcement.
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