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Theory and Policy; A Commenton Dixit andon Current Tax Theory

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  • Vito Tanzi

Abstract

In a recent paper Professor Dixit criticized the argument that when collection lags characterize tax systems, recourse to inflationary finance should be minimized. He argued that, in such case, rather than minimizing recourse to inflationary finance, the rates of the commodity taxes should be adjusted to maintain them at an optimal level and, thus, to minimize welfare costs. This paper shows that the requirements for following Dixit’s policy prescription are almost impossible to meet. The paper argues that more attention should be paid by tax theorists to the constraints under which tax reforms are made.

Suggested Citation

  • Vito Tanzi, 1992. "Theory and Policy; A Commenton Dixit andon Current Tax Theory," IMF Working Papers 92/15, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:92/15
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    Cited by:

    1. Slemrod, Joel & Yitzhaki, Shlomo, 2002. "Tax avoidance, evasion, and administration," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 22, pages 1423-1470 Elsevier.
    2. Kalina Koleva, 2005. "A la recherche de l'administration fiscale optimale : l'approche par les coûts d'efficience," Cahiers de la Maison des Sciences Economiques r05050, Université Panthéon-Sorbonne (Paris 1).
    3. Don Fullerton & Erich Muehlegger, 2017. "Who Bears the Economic Costs of Environmental Regulations?," CESifo Working Paper Series 6596, CESifo Group Munich.

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