Income Tax Evasion Revisited: The Impact of Interest Rate Yields on Tax-Free Municipal Bonds

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Why is it important?

This study empirically investigates factors that influence the degree of income tax evasion in the U.S. In this study, it is hypothesized that the tax-free interest on municipal bonds is a form of tax avoidance. Indedd, it is found that the higher this tax-free interest rate, the lower the degrre to which tax evasion occurs.