Tax Evasion: Ineffective Regulations Lead to Current Tax Issues
Mentor:Dr. Rebecca Hatch, Professor of Sociology, Mt. San Antonio College
This research determines what factors paint the picture of the typical tax evader in comparison to the public’s perception by providing insight into whether or not the current policies for regulating the crime are effective. The literature and statistical data which evaluate the commonalities among the perpetrators of the crime show that not one income tax bracket, social class, or group of individuals is predisposed to committing tax evasion. Public perception, according to the available data, suggests that the majority of people do not consider tax evasion to be a wrongful act, thus revealing a disparity between who the public feels is more likely to evade paying their taxes versus who those who actually commit the crime. However, due to the media’s influence, evidence suggests that the general public is led to believe that tax evasion usually takes place among wealthy businessmen and corporate executives but this is not always true. Because the government’s current policies are reactive to the issue, rather than preventative, the tax gap between the revenue that is owed to the government, compared to what is actually paid, continues to grow. Theories suggest that the perception that the lower-classes are left with the tax burden to make up for the loss in revenue not paid by the upper-classes who receive more tax breaks leads the lower classes into a cycle of tax evasion as well. This perception is caused by those who choose to evade. Findings from this research encourage the government to enact income-fair policies instead of the current policies in order to decrease the overall incidence of the crime while understanding that any one group of individuals is likely to cheat on their taxes if given the incentive to do so.