Corruption, Tax Evasion and the Laffer Curve
In a corrupt tax administration a rise in tax rate sets off complicated strategic moves by both taxpayers and administrators. It is shown that in some circumstances, this may bring about Laffer like behavior of overall tax revenue, i.e. a higher tax rate results in smaller net revenue for the government. Further, a more intense tax effort by increasing the number of returns audited may also reduce net revenues. Finally if tax and fine rates positively influence the level of corruption in the administration, these outcomes become more likely. Copyright 2000 by Kluwer Academic Publishers
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chander, Parkash & Wilde, Louis, 1992. "Corruption in tax administration," Journal of Public Economics, Elsevier, vol. 49(3), pages 333-349, December.
- Bac, Mehmet, 1996. "Corruption and Supervision Costs in Hierarchies," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 99-118, April.
- Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
- Herbert Dawid & Gustav Feichtinger, 1996. "On the persistence of corruption," Journal of Economics, Springer, vol. 64(2), pages 177-193, June.
- Thompson, Velma Montoya & Thompson, Earl A, 1993. "Achieving Optimal Fines for Political Bribery: A Suggested Political Reform," Public Choice, Springer, vol. 77(4), pages 773-91, December.
- Galeotti, Gianluigi & Merlo, Antonio, 1994. "Political Collusion and Corruption in a Representative Democracy," Public Finance = Finances publiques, , vol. 49(Supplemen), pages 232-43.
- Lui, Francis T., 1986. "A dynamic model of corruption deterrence," Journal of Public Economics, Elsevier, vol. 31(2), pages 215-236, November.
- Banerjee, A.V., 1997. "A Theory of Misgovernance," Working papers 97-4, Massachusetts Institute of Technology (MIT), Department of Economics.
- Bac, Mehmet, 1996. "Corruption, Supervision, and the Structure of Hierarchies," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(2), pages 277-98, October.
- Graetz, Michael J. & Reinganum, Jennifer F. & Wilde, Louis L., .
"The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement,"
589, California Institute of Technology, Division of the Humanities and Social Sciences.
- Graetz, Michael J & Reinganum, Jennifer F & Wilde, Louis L, 1986. "The Tax Compliance Game: Toward an Interactive Theory of Law Enforcement," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(1), pages 1-32, Spring.
- Basu, Kaushik & Bhattacharya, Sudipto & Mishra, Ajit, 1992. "Notes on bribery and the control of corruption," Journal of Public Economics, Elsevier, vol. 48(3), pages 349-359, August.
- Abhijit V. Banerjee, 1997. "A Theory of Misgovernance," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1289-1332.
- Gordon Tullock, 1996. "Corruption Theory And Practice," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 6-13, 07.
- Jong-Il Kim & Lawrence J. Lau, 1996. "The sources of Asian Pacific economic growth," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 448-54, April.
- Manion, Melanie, 1996. "Corruption by Design: Bribery in Chinese Enterprise Licensing," Journal of Law, Economics and Organization, Oxford University Press, vol. 12(1), pages 167-95, April.
- Feichtinger, Gustav & Wirl, Franz, 1994. "On the stability and potential cyclicity of corruption in governments subject to popularity constraints," Mathematical Social Sciences, Elsevier, vol. 28(2), pages 113-131, October.
- Minford, Patrick & Ashton, Paul, 1991.
"The Poverty Trap and the Laffer Curve--What Can the GHS Tell Us?,"
Oxford Economic Papers,
Oxford University Press, vol. 43(2), pages 245-79, April.
- Ashton, Paul & Minford, Patrick, 1988. "The Poverty Trap and the Laffer Curve: What Can the GHS Tell Us?," CEPR Discussion Papers 275, C.E.P.R. Discussion Papers.
- Besley, Timothy & McLaren, John, 1993. "Taxes and Bribery: The Role of Wage Incentives," Economic Journal, Royal Economic Society, vol. 103(416), pages 119-41, January.
- Francis T. Lui, 1996. "Three Aspects Of Corruption," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 26-29, 07.
- Ira N. Gang & Arindam Das-Gupta, 1998. "Decomposing Revenue Effects of Tax Evasion, Base Broadening and Tax Rate Reduction," Departmental Working Papers 199506, Rutgers University, Department of Economics.
- Bliss, Christopher & Di Tella, Rafael, 1997. "Does Competition Kill Corruption?," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1001-23, October.
- Pommerehne, Werner W & Weck-Hannemann, Hannelore, 1996. "Tax Rates, Tax Administration and Income Tax Evasion in Switzerland," Public Choice, Springer, vol. 88(1-2), pages 161-70, July.
- Bowles, Roger & Garoupa, Nuno, 1997. "Casual police corruption and the economics of crime," International Review of Law and Economics, Elsevier, vol. 17(1), pages 75-87, March.
- Steven N. S. Cheung, 1996. "A Simplistic General Equilibrium Theory Of Corruption," Contemporary Economic Policy, Western Economic Association International, vol. 14(3), pages 1-5, 07.
- Mookherjee, Dilip & Png, I P L, 1995. "Corruptible Law Enforcers: How Should They Be Compensated?," Economic Journal, Royal Economic Society, vol. 105(428), pages 145-59, January.
When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:105:y:2000:i:1-2:p:61-78. See general 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: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.