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have suggested that a person might experience costs such as travel costs, paying third part for laundering and forgoing of interest payments to shelter black money. Besides, on side of tax authorities, detection costs have been identified. (Bayer & Sutter, 2009) stress that pareto improvement can occur if both parties save such wasteful costs in a manner that probability of detection remains same. (Bayer & Sutter, 2009) further added that concealment and detection goings-on lead to some additional burden of income taxation known to cause dead weight loss due to distortionary impact of income taxes. (Bayer & Sutter, 2009) have experimented if detection and concealment costs as dependent on two parameters namely prevailing tax rate and penalty rate. Their model results show that waste tends to increase with tax rates and penalty rates. This inquiry of potential effects of two parameters on social costs has been defined as paper's primary focus by (Bayer & Sutter, 2009).

(Lee, 2001) has also worked on similar grounds and examines tax evasion as direct consequence of increase in tax rate where tax evaders self-insure to escape fines and penalties. (Lee, 2001) talks about marginal productivity of self-insurance and suggests that increased tax rates lower tax compliance. (Lee, 2001) views tax evasion as risk taking activity where penalty has to be paid on detection. (Lee, 2001) follows (Allingham & Sandmo, 1972) and extends their approach to logic that taxpayers may not only under report income but also invest to reduce risks associated with tax evasion where one possible way can be insurance against penalties. (Lee, 2001) assumes that self-insurance efforts are in direction to make detection difficult because higher detected income means more penalties. Hence, individuals engage in self-insurance efforts to conceal their taxable income. (Lee, 2001) analyzes relationship between tax evasion and tax rates in presence of self-insurance and imperfect detection. (Lee, 2001) finds contradiction in past researches and posits that higher tax rates mean more penalties thus leading to increased demand for self-insurance and added tax evasion incentives. While making this stance (Lee, 2001) assumes that 'marginal productivity of self-insurance is not too small'. (Lee, 2001) concludes and confirms his hypothesis above higher tax rates mean lower compliance if 'marginal productivity of self-insurance is not too small'.

(Borck, 2004) also extends work of (Allingham & Sandmo, 1972) and proposes that stricter enforcement may sometimes cause increased tax evasion. In this paper author takes a stance to which most of us might not agree. Likewise others, (Borck, 2004) also confirms fact that individuals may end up evading taxes but penalties have to paid once you are caught. (Borck, 2004) does not neglect the fact that a decisive voter may find redistributive tax more attractive in existence of stricter enforcements. (Borck, 2004) agrees that stricter enforcement might reduce marginal benefit of tax evasion and thus tax evasion but also suggest that strict enforcements may lead to higher evasion on basis of labor supply response. He argues that stricter enforcements may not channel effect through labor supply response but through a political effect. (Borck, 2004) argues that stricter policies like increased audits may increase tax evasion as small tax evaders find taxation attractive in presence of stricter e