Tax Evasion is a situation where a nation's corporations or citizens begin committing tax scams and fraud in order to avoid paying their taxes. This gives a moderate penalty to income from Income Tax, Sales Tax, Corporate Tax and Capital Gains Tax. It also gives a penalty (but much smaller) for revenue from the Flat Income Tax policy.

Tax evasion is caused by a high Corporation Tax or Income Tax. Abolishing the corporate tax and lowering the income tax to 66% or lower should discourage people from tax evasion.