Modernization of Tax Administrations and Optimal Fiscal Policies
AbstractSince Sandmo (1981) , many articles have analyzed optimal fiscal policies in economies with tax evasion. All share a feature: they assume that the cost of enforcing the tax law is exogenous. However, governments often invest resources to reduce these enforcement costs. In a very simple model, we incorporate such investments in the analysis of an optimal fiscal policy. We characterize their optimal level and we show numerically how they interact with the other dimensions of the optimal fiscal policy. Finally, we highlight the differences between our results and those obtained in a model without investment in the tax administration. Copyright � 2009 Wiley Periodicals, Inc..
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.
Volume (Year): 11 (2009)
Issue (Month): 6 (December)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1097-3923
More information through EDIRC
Other versions of this item:
- Martin Besfamille & Cecilia Parlatore Siritto, 2009. "Modernization of Tax Administrations and Optimal Fiscal Policies," Department of Economics Working Papers 2009-07, Universidad Torcuato Di Tella.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alessandro Balestrino & Umberto Galmarini, 2003. "Imperfect Tax Compliance and the Optimal Provision of Public Goods," Bulletin of Economic Research, Wiley Blackwell, vol. 55(1), pages 37-52, January.
- Kaplow, Louis, 1990.
"Optimal taxation with costly enforcement and evasion,"
Journal of Public Economics,
Elsevier, vol. 43(2), pages 221-236, November.
- Louis Kaplow, 1991. "Optimal Taxation with Costly Enforcement and Evasion," NBER Working Papers 2996, National Bureau of Economic Research, Inc.
- Marhuenda, Francisco & Ortuño, Ignacio, 1997. "Tax enforcement problems," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/4178, Universidad Carlos III de Madrid.
- Graetz, Michael J & Reinganum, Jennifer F & Wilde, Louis L, 1986.
"The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement,"
Journal of Law, Economics and Organization,
Oxford University Press, vol. 2(1), pages 1-32, Spring.
- Graetz, Michael J. & Reinganum, Jennifer F. & Wilde, Louis L., . "The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement," Working Papers 589, California Institute of Technology, Division of the Humanities and Social Sciences.
- Cremer, Helmuth & Gahvari, Firouz, 1996. "Tax evasion and the optimum general income tax," Journal of Public Economics, Elsevier, vol. 60(2), pages 235-249, May.
- Falkinger, Josef, 1991. "On optimal public good provision with tax evasion," Journal of Public Economics, Elsevier, vol. 45(1), pages 127-133, June.
- Slemrod, Joel & Kopczuk, Wojciech, 2002.
"The optimal elasticity of taxable income,"
Journal of Public Economics,
Elsevier, vol. 84(1), pages 91-112, April.
- Kolm, Serge-Christophe, 1973. "A note on optimum tax evasion," Journal of Public Economics, Elsevier, vol. 2(3), pages 265-270, July.
- Marhuenda, Francisco & Ortuno-Ortin, Ignacio, 1997. " Tax Enforcement Problems," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 61-72, March.
- Cowell, Frank A, 1985. "The Economic Analysis of Tax Evasion," Bulletin of Economic Research, Wiley Blackwell, vol. 37(3), pages 163-93, September.
- Nahum D. Melumad & Dilip Mookherjee, 1989. "Delegation as Commitment: The Case of Income Tax Audits," RAND Journal of Economics, The RAND Corporation, vol. 20(2), pages 139-163, Summer.
- Laffont, Jean-Jacques & Martimort, David, 2005.
"The design of transnational public good mechanisms for developing countries,"
Journal of Public Economics,
Elsevier, vol. 89(2-3), pages 159-196, February.
- Laffont, Jean-Jacques & Martimort, David, 2004. "The Design of Transnational Public Good Mechanisms for Developing Countries," IDEI Working Papers 267, Institut d'Économie Industrielle (IDEI), Toulouse.
- Laffont, Jean-Jacques & Martimort, David, 2005. "The Design of Transnational Public Good Mechanisms for Developing Countries," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Slemrod, Joel & Yitzhaki, Shlomo, 2002.
"Tax avoidance, evasion, and administration,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470
- Pierre Pestieau & Uri M. Possen & Steven M. Slutsky, 2004. "Jointly Optimal Taxes and Enforcement Policies in Response to Tax Evasion," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(2), pages 337-374, 05.
- Slemrod, Joel & Yitzhaki, Shlomo, 1987.
" The Optimal Size of a Tax Collection Agency,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 89(2), pages 183-92.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- Usher, Dan, 1986.
"Tax Evasion and the Marginal Cost of Public Funds,"
Western Economic Association International, vol. 24(4), pages 563-86, October.
- Cremer, Helmuth & Gahvari, Firouz, 1994. " Tax Evasion, Concealment and the Optimal Linear Income Tax," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(2), pages 219-39.
- Mayshar, Joram, 1991. " Taxation with Costly Administration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(1), pages 75-88.
- Pestieau, Pierre & Possen, Uri & Slutsky, Steve, 1994. "Optimal Differential Taxes and Penalties," Public Finance = Finances publiques, , vol. 49(Supplemen), pages 15-27.
- Gottlieb, Daniel, 1985. "Tax evasion and the prisoner's dilemma," Mathematical Social Sciences, Elsevier, vol. 10(1), pages 81-89, August.
- Slemrod, Joel, 1990.
"Optimal Taxation and Optimal Tax Systems,"
Journal of Economic Perspectives,
American Economic Association, vol. 4(1), pages 157-78, Winter.
- Bloch, Francis & Zenginobuz, E. Unal, 2006. "Tiebout equilibria in local public good economies with spillovers," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1745-1763, September.
- Yitzhaki, Shlomo & Vakneen, Yitzhak, 1989. "On the Shadow Price of a Tax Inspector," Public Finance = Finances publiques, , vol. 44(3), pages 492-505.
- Debraj Ray & Rajiv Vohra, 2001. "Coalitional Power and Public Goods," Journal of Political Economy, University of Chicago Press, vol. 109(6), pages 1355-1384, December.
- Slemrod, Joel, 1994. "Fixing the leak in Okun's bucket optimal tax progressivity when avoidance can be controlled," Journal of Public Economics, Elsevier, vol. 55(1), pages 41-51, September.
- Chander, Parkash & Wilde, Louis L, 1998. "A General Characterization of Optimal Income Tax Enforcement," Review of Economic Studies, Wiley Blackwell, vol. 65(1), pages 165-83, January.
- John O. Ledyard & Thomas R. Palfrey, 1999. "A Characterization of Interim Efficiency with Public Goods," Econometrica, Econometric Society, vol. 67(2), pages 435-448, March.
- Mookherjee, Dilip & Png, Ivan, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 399-415, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.