Tax Rates, Tax Evasion and Why Increased Tax Audits Fail: An Analysis of Greek Microdata

Using a proprietary micro-dataset on tax audits from Greece, the authors examine the link between tax evasion and corruption in the years following the economic recession. The analysis suggests that existing high tax rates and spending on tax audits have failed and will continue to fail to produce any viable economic results: Increasing the level of taxes or spending on tax enforcement does not yield the anticipated increase in tax revenue collection.