Modeling Distortionary Taxation
AbstractThere has been a lot of discussion recently regarding the macroeconomic consequences of a distortionary taxation system. However the way this distortionary taxation scheme or instrument is modeled in macroeconomic analysis, as well as the ability of these models to capture the effects implied by this distortionary taxation system, is subject to criticism. This work provide a formal analysis in an attempt to build a methodological tool (i.e. a functional form), in order to capture the distortionary consequences of the tax system. This tool could be useful instrument in economic analysis regarding the effects of a distortionary taxation system, and its relation to the other macroeconomic variables, like for example dept, deficit, and inflation.
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Bibliographic InfoPaper provided by Bank of Greece in its series Working Papers with number 95.
Length: 26 pages
Date of creation: Mar 2009
Date of revision:
Distortionary Taxation; Income Tax; Tax Revenue; Tax evasion; Tax Compliance; Dynamic path of debt;
Find related papers by JEL classification:
- C00 - Mathematical and Quantitative Methods - - General - - - General
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
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- Nigel Andrew Chalk & Richard Hemming, 2000. "Assessing Fiscal Sustainability in Theory and Practice," IMF Working Papers 00/81, International Monetary Fund.
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