IDEAS home Printed from
   My bibliography  Save this paper

Optimal Tax Mix and Public Goods Supply Under Multilateral Tax Evasion


  • Hindriks, J.


The primary objective of this paper is to analyse the role of evasion possibilities as a determinant of the general structure of commodity and income taxes and of public goods supply. A secondary objective is to provide a defence of differentiated commodity taxes based on the screening role of the purchases of certain goods. Formally, we solve the (constrained) Pareto-efficient commodity and income taxes when both types of taxes can be evaded. We find explicit solutions that readily incorporate the ease with which the transaction may be concealed. Many traditional issues are then (re-)considered, such as (i) the direct versus indirect tax controversy (proposition 1), (ii) uniform versus differential commodity taxes (proposition 2), (iii) regressivity versus progressivity (proposition 3) and (iv) decentralisation versus non-decentralisation of public good supply (proposition 4). We also formulate a modified Samuelson rule that accounts for the impact of tax evasion on the optimal provision of public goods.

Suggested Citation

  • Hindriks, J., 1999. "Optimal Tax Mix and Public Goods Supply Under Multilateral Tax Evasion," Discussion Papers 9920, Exeter University, Department of Economics.
  • Handle: RePEc:exe:wpaper:9920

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below 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.

    More about this item



    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods


    Access and download statistics


    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:exe:wpaper:9920. 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: (Carlos Cortinhas). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.