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Redistribution and Tax Evasion: an Asymmetric Information Approach

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  • Silvia Platoni

    ()
    (DISCE, Università Cattolica)

  • Francesco Timpano

    ()
    (DISCE, Università Cattolica)

Abstract

The article studies the optimal redistribution system, achieved by direct taxation, indirect taxation and public provision of the pseudo-necessary good, when individuals, who differ in productivity, can take hidden actions (tax evasion by moral hazard) and have hidden information (tax evasion by adverse selection). It proves that any Government willing to effectively reallocate resources among individuals has to undertake measures against tax evasion, i.e. to establish tax evasion fines.

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File URL: http://www.unicatt.it/dipartimenti/DISES/allegati/dises1394.pdf
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Bibliographic Info

Paper provided by Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE) in its series DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali with number dises1394.

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Length: 35 pages
Date of creation: Jul 2013
Date of revision:
Publication status: Published in Review of Economics, Month aaaa, pages nn1-nn2
Handle: RePEc:ctc:serie2:dises1394

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Web page: http://www.unicatt.it/Dipartimenti/DISES
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Keywords: Redistribution; Tax Evasion; Asymmetric Information.;

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  1. Atkinson, A. B. & Stiglitz, J. E., 1976. "The design of tax structure: Direct versus indirect taxation," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 55-75.
  2. Anthony B. Atkinson, 1976. "Optimal Taxation and the Direct versus Indirect Tax Controversy," Working Papers 247, Queen's University, Department of Economics.
  3. de Bartolome, Charles A.M., 1990. "The Inequity Of An Efficient Indirect Tax Structure," Working Papers 90-32, C.V. Starr Center for Applied Economics, New York University.
  4. 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.
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  7. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680, Octomber.
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  9. 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.
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  13. Kaiser, Helmut, 1993. "Testing for Separability between Commodity Demand and Labour Supply in West Germany," Empirical Economics, Springer, vol. 18(1), pages 21-56.
  14. Michael Abbott & Orley Ashenfelter, 1974. "Labor Supply, Commodity Demand, and the Allocation of Time," Working Papers 437, Princeton University, Department of Economics, Industrial Relations Section..
  15. Saez, Emmanuel, 2002. "The desirability of commodity taxation under non-linear income taxation and heterogeneous tastes," Journal of Public Economics, Elsevier, vol. 83(2), pages 217-230, February.
  16. Silvia Platoni, 2010. "Asymmetric Information and Annuities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(3), pages 501-532, 06.
  17. Myles,Gareth D., 1995. "Public Economics," Cambridge Books, Cambridge University Press, number 9780521497695, April.
  18. Burkett, John P., 2006. "Microeconomics: Optimization, Experiments, and Behavior," OUP Catalogue, Oxford University Press, number 9780195189629, Octomber.
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