In this paper we analyze the effect of income distribution on tax evasion. Given that this relationship is difficult to isolate using field data, we explicitly introduce the psychological costs of evasion in a standard public goods experiment by means of a public mechanism of audit and sanction. Tax compliance is then analyzed in two treatments with different distributions of endowments, although aggregate income levels are exactly the same. Our results suggest that lower evasion levels are associated with more egalitarian income distributions.

Key words: tax compliance, experimental economics, equity.
JEL classification: C91, H26.