This paper provides evidence of evasion in the context of a widely used commuter tax allowance, and explores evasion spillovers
as a determinant of the individual compliance decision. For this purpose, we exploit discontinuities in the commuter allowance
scheme and employ a research design resting on a large panel of individual tax returns. We find that around 30 percent of
all allowance claims are overstated and, consistent with deliberate tax evasion, we observe sharp reactions of tax payers
to thresholds where the allowance discretely jumps to a higher amount. Further, we use variation in job changes to uncover
spillover effects from the work environment on the individual compliance decision. These effects appear to be asymmetric:
job changers moving to companies with a higher fraction of cheaters increase their cheating. In contrast, movers to companies
with a lower fraction of cheaters tend not to alter their reporting behaviour. We provide suggestive evidence that the spillover
has more to do with an information environment, but can ultimately not reject other behavioural explanations such as asymmetric
persistence of norms.
Forschungsbereich:Regionalökonomie und räumliche Analyse