The Theory of Tax Evasion: A Retrospective View‪.‬

INTRODUCTION If someone were to write a full history of taxation, including both practitioners' experience and the thinking of theorists, it is probably a good guess that tax evasion would be part of the picture from the very start. The formal economic theory of tax evasion, on the other hand, is of considerably more recent origin and started to develop only a little over 30 years ago. To the best of my knowledge, its beginning can be dated to 1972 (1) with the publication of the article "Income Tax Evasion: A Theoretical Analysis" by Michael Allingham and myself (Allingham and Sandmo, 1972). (2) It was followed by a large number of contributions to the literature which extended the original model in a number of directions. The present paper, although not attempting a complete survey of the literature, reviews the main problems and developments in the theoretical literature on tax evasion and relates it to other issues that have traditionally been central in the theory of public finance.