How to fight tax evasion? Lessons from behavioral economics.

Summary The back cover states: "Tax evasion is a subject that eludes the tools of traditional economic analysis. Like any illegal activity, it escapes the researcher's observation and is hidden from the authorities, which makes empirical analyses of the phenomenon difficult. On the theoretical level, the application of the cost-benefit calculation that the "rational" taxpayer is supposed to make leads to a paradox: contrary to a widely held idea, the benefits of fraud are so high, and the risk of punishment so low, that one may be surprised that it remains so limited. This double challenge posed by tax evasion decisions has only recently been addressed, thanks to the emergence of a new approach, behavioral economics, which relies on psychology to shed light on economic behavior, and of a new method, experimental economics, which makes it possible to empirically study economic behavior on which it is difficult to collect convincing data. This booklet reports on the results of this work and presents an overview of the tax policy tools that have emerged from it.