# Mathematical models describing the effects of different tax evasion behaviors

## TL;DR

This paper develops microscopic economic models to analyze how different tax evasion behaviors influence income distribution and inequality, revealing that higher evasion levels increase inequality and income disparities.

## Contribution

It introduces a novel microscopic modeling approach that accounts for diverse individual tax evasion behaviors and their impact on income inequality.

## Key findings

- Gini index increases with higher evasion levels
- Income disparity between evaders and honest taxpayers grows quadratically with evasion
- Evasion spread has minimal effect on inequality measures

## Abstract

Microscopic models describing a whole of economic interactions in a closed society are considered. The presence of a tax system combined with a redistribution process is taken into account, as well as the occurrence of tax evasion. In particular, the existence is postulated, in relation to the level of evasion, of different individual taxpayer behaviors. The effects of the mentioned different behaviors on shape and features of the emerging income distribution profile are investigated qualitatively and quantitatively. Numerical solutions show that the Gini inequality index of the total population increases when the evasion level is higher, but does not depend significantly on the evasion spread. For fixed spread, the relative difference between the average incomes of the worst evaders and honest taxpayers increases approximately as a quadratic function of the evasion level.