Towards a theory of the direct-indirect tax mix
AbstractDespite the fact that all developed economies levy broadly-based indirect taxes alongside direct taxes, little theory is devoted to explaining the direct-indirect tax mix. Our purpose is to show that if different taxes have different evasion characteristics, some optimal tax mix emerges naturally. Assuming that only income tax can be evaded and focusing on a two-class economy, we analyze the case for supplementing optimal (nonlinear) income taxation with commodity taxation, and we develop conditions under which the latter should or should not be uniform.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 1992026.
Date of creation: 01 Mar 1992
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Other versions of this item:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
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- Julien Daubanes & Pierre Lasserre, 2011.
"Optimum Commodity Taxation with a Non-Renewable Resource,"
CER-ETH Economics working paper series
11/151, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
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