IDEAS home Printed from https://ideas.repec.org/p/ctc/serie2/dises1394.html
   My bibliography  Save this paper

Redistribution and Tax Evasion: an Asymmetric Information Approach

Author

Listed:
  • 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.

Suggested Citation

  • Silvia Platoni & Francesco Timpano, 2013. "Redistribution and Tax Evasion: an Asymmetric Information Approach," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1394, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie2:dises1394
    as

    Download full text from publisher

    File URL: http://www.unicatt.it/dipartimenti/DISES/allegati/dises1394.pdf
    File Function: First version, 2013
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robin Boadway & Motohiro Sato, 2000. "The Optimality of Punishing Only the Innocent: The Case of Tax Evasion," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(6), pages 641-664, December.
    2. Cremer, Helmuth & Pestieau, Pierre & Rochet, Jean-Charles, 2001. "Direct versus Indirect Taxation: The Design of the Tax Structure Revisted," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 781-799, August.
    3. Mirrlees, J. A., 1976. "Optimal tax theory : A synthesis," Journal of Public Economics, Elsevier, vol. 6(4), pages 327-358, November.
    4. 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.
    5. Cremer, Helmuth & Gahvari, Firouz, 1993. "Tax evasion and optimal commodity taxation," Journal of Public Economics, Elsevier, vol. 50(2), pages 261-275, February.
    6. 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.
    7. Christiansen, Vidar, 1984. "Which commodity taxes should supplement the income tax?," Journal of Public Economics, Elsevier, vol. 24(2), pages 195-220, July.
    8. Burkett, John P., 2006. "Microeconomics: Optimization, Experiments, and Behavior," OUP Catalogue, Oxford University Press, number 9780195189629.
    9. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    10. 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.
    11. 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.
    12. Deaton, Angus & Meullbauer, John, 1981. "Functional Forms for Labor Supply and Commodity Demands with and without Quantity Restrictions," Econometrica, Econometric Society, vol. 49(6), pages 1521-1532, November.
    13. Silvia Platoni, 2010. "Asymmetric Information and Annuities," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(3), pages 501-532, June.
    14. Kaiser, Helmut, 1993. "Testing for Separability between Commodity Demand and Labour Supply in West Germany," Empirical Economics, Springer, vol. 18(1), pages 21-56.
    15. Myles,Gareth D., 1995. "Public Economics," Cambridge Books, Cambridge University Press, number 9780521497695, May.
    16. Michael Abbott & Orley Ashenfelter, 1976. "Labour Supply, Commodity Demand and the Allocation of Time," Review of Economic Studies, Oxford University Press, vol. 43(3), pages 389-411.
    17. A. B. Atkinson, 1977. "Optimal Taxation and the Direct versus Indirect Tax Controversy," Canadian Journal of Economics, Canadian Economics Association, vol. 10(4), pages 590-606, November.
    18. 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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Redistribution; Tax Evasion; Asymmetric Information.;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ctc:serie2:dises1394. 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: (Francesco Timpano) or (Giancarlo Birello). General contact details of provider: http://edirc.repec.org/data/dscatit.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.