Tax revenues, fiscal corruption and "shame" costs
AbstractIn this paper we explore tax revenues in a regime of widespread fiscal corruption in a static framework. We prove that the relationship between the tax rate and tax revenues depends on the relevance of the "shame effect" of being detected in a corrupt transaction. In countries with a "low shame" effect, tax revenues grow as the tax rate increases. Moreover, there is a critical tax rate where the growth rate of tax revenues begins to reduce. In countries with a high "shame effect" tax revenues increase up to a threshold value and then decrease.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 26 (2009)
Issue (Month): 6 (November)
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Web page: http://www.elsevier.com/locate/inca/30411
Corruption Evasion Tax revenues;
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