Tax Evasion and the Marginal Cost of Public Funds
AbstractTax evasion is analogous to deadweight loss in its effect upon the rules for cost-benefit analysis of public sector projects. Deadweight loss and tax evasion both cause the marginal cost of public funds to increase as tax payers attempt to reduce the tax base in response to increases in tax rates. In one case, the social cost is from the diversion of resources from highly taxed to less taxed activities. In the other, the social cost includes the expense of concealment of income from the tax collector, the cost to the public sector of detecting and punishing tax evasion, and the cost of punishment to the convicted tax evader. It follows that a complete theory of optimal taxation can be derived from the susceptibilities to evasion of the different means of taxation.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 637.
Length: 45 pages
Date of creation: 1986
Date of revision:
Other versions of this item:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Babcock).
If references are entirely missing, you can add them using this form.