Short answers, pulled from the story.
Tax evasion is an illegal attempt to reduce tax liability through dishonest means such as under-reporting income, overstating deductions, or hiding money. Tax avoidance is the legal use of tax laws to reduce one's tax burden. Both are forms of tax noncompliance, but only evasion is a crime.
The IRS estimated the 2001 tax gap at $345 billion and the 2006 tax gap at $450 billion. A study of the 2008 gap found a range of $450-$500 billion, with unreported income of roughly $2 trillion, meaning 18-19% of total reportable income was not properly reported.
Yes. A 2017 study by Alstadsæter and colleagues found that the top 0.01% of earners are about ten times more likely than average people to evade taxes and evade as much as 25% of their taxes. Research using Swiss Leaks and Panama Papers data found evasion rates of about 30% among the wealthiest 0.01% in Scandinavia, compared to an average of 3%.
The Pandora Papers were 11.9 million leaked financial records, totaling 2.9 terabytes of data, released by the International Consortium of Investigative Journalists in early October 2021. They exposed secret offshore accounts of around 35 world leaders, including Sheikh Mohammed bin Rashid al-Maktoum of the United Arab Emirates, who was identified as a shareholder in firms registered in the Bahamas and British Virgin Islands.
Economists Michael G. Allingham and Agnar Sandmo developed a model of tax evasion in 1972, building on Nobel laureate Gary Becker's 1968 work on the economics of crime. The model holds that evasion depends on the probability of detection, the level of punishment, and the taxpayer's level of risk aversion. Later research added that compliance also rises when people believe tax money is spent appropriately and when they feel included in public decisions.
Tax farming was a system in which governments sold the right to collect taxes to private entities in advance, allowing those collectors to profit from the difference. Abuses by tax farmers, combined with a tax system that exempted the French aristocracy, were a primary cause of the French Revolution that overthrew Louis XVI.