Kaisa Kotakorpi: Tax evasion – can we make the invisible visible?
“The details of the tax system and related monitoring practices have a significant influence on tax revenues. It is important to study these questions to know what kind of a tax system works best in maintaining the funding base for welfare services,” Kotakorpi says.
According to Kotakorpi, a psychological approach to economics and the study of public finance has been a key element of her research. She says that economists have been puzzled that so many people pay taxes even though the chances of being audited are often low.
“A psychological approach to economics explores, for example, the psychological elements associated with the payment of taxes, which conventional economics has largely overlooked. These elements can include for example social norms and a concern for vulnerable groups within society, which inspires people to make a contribution to the public good.”
“Tax evasion research has been path-breaking also in applying experimental methods to study important phenomena in public economics,” Kotakorpi points out.
As Kotakorpi says, tax evasion is, by definition, something that people and companies want to hide, so it is usually not possible to detect tax evasion directly from any administrative records.
“To study tax evasion, researchers must take an innovative approach to uncover the invisible.”
