The Individual Taxpayer Utility Function with Tax Optimization and Fiscal Fraud Environment
AbstractIn this paper I examine a taxpayer utility function determined by the extended set of variables – i.e. consumption, labor and tax-evasion propensity. This constitutes the main framework for the analysis of taxpayer’s decision making process under assumption that in the economy there exist two main reduction methods: a) access to tax optimization techniques, which may decrease effective tax burden and are fully compliant with binding laws, but generate transactional costs and 2) possibility of fiscal fraud – in particular tax evasion, as the alternative method of reducing tax due, which has no direct transactional costs, but involves tax litigation risk.
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Bibliographic InfoArticle provided by University of Information Technology and Management, Institute of Financial Research and Analysis in its journal e-Finanse.
Volume (Year): 7 (2011)
Issue (Month): 3 (November)
taxation theory; taxpayer utility; tax evasion;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
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