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Governments increasingly use changes in tax rules to combat evasion.
We develop a general approach to point-identify tax compliance
along with supply and demand elasticities. Identification
requires data on prices and quantities, variation in tax policy, and
a demand or supply shifter. We illustrate our approach using data
on Airbnb collection agreements, where taxes are enforced by shifting
the statutory burden away from hosts and onto renters via the
platform. We find that taxes are paid on roughly zero to 1.6 percent
of Airbnb transactions prior to enforcement.
