INFLUENCING THE PROSPECTS OF TAX EVASION

Two proposals to enhance tax compliance are discussed within the conte xt of the Dutch income tax. Both proposals use prospect theory and are supported by empirical data. First, it is argued that deliberate over withholding of income taxes will further the tendency to comply. Secon dly, it is demonstrated that offering the taxpayer a choice between fu ll itemised deduction or a considerable overall standard deduction wil l enhance compliance as well as considerably reduce the efforts needed by the tax authorities to prevent income tax evasion.