IDEAS home Printed from https://ideas.repec.org/p/irv/wpaper/080914.html

Reducing Current Taxes to Raise Future Revenue

Author

Listed:
  • Amihai Glazer

    (Department of Economics, University of California-Irvine)

Abstract

A government which raises taxes in the current period may induce workers to invest in finding ways to reduce their tax payments, and so may reduce the government's ability to raise revenue in the future. Therefore, a government that fears it may have to raise much revenue in the future may set taxes in the current period at a lower level than that which would maximize revenue, or that would maximize social welfare in that period.

Suggested Citation

  • Amihai Glazer, 2008. "Reducing Current Taxes to Raise Future Revenue," Working Papers 080914, University of California-Irvine, Department of Economics.
    • Handle: RePEc:irv:wpaper:080914
    as

    Download full text from publisher

    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2008-09/glazer-14.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christina D. Romer & David H. Romer, 2009. "Do Tax Cuts Starve the Beast? The Effect of Tax Changes on Government Spending," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 40(1 (Spring), pages 139-214.
    2. Svensson, Jakob, 1998. "Investment, property rights and political instability: Theory and evidence," European Economic Review, Elsevier, vol. 42(7), pages 1317-1341, July.
    3. Barro, Robert J, 1979. "On the Determination of the Public Debt," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 940-971, October.
    4. Bruno Frey & Friedrich Schneider, 2000. "Informal and underground economy," Economics working papers 2000-04, Department of Economics, Johannes Kepler University Linz, Austria.
    5. David Giles & Patrick Caragata, 2001. "The learning path of the hidden economy: the tax burden and tax evasion in New Zealand," Applied Economics, Taylor & Francis Journals, vol. 33(14), pages 1857-1867.
    6. Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:prg:jnlpep:v:preprint:id:697:p:1-15 is not listed on IDEAS
    2. repec:tsa:wpaper:0090eco is not listed on IDEAS
    3. Salar, Laleena & Zaman, Khalid & Khilji, Bashir Ahmad & Khan, Muhammad Mushtaq & Lodhi, Mohammad Saeed, 2013. "The consequences of revenue gap in Pakistan: Unveiling the reality," Economic Modelling, Elsevier, vol. 30(C), pages 281-294.
    4. Lipatov, Vilen, 2008. "Social Interaction in Tax Evasion," MPRA Paper 8829, University Library of Munich, Germany.
    5. Fabrizio Carmignani, 2003. "Political Instability, Uncertainty and Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 1-54, February.
    6. Dzhumashev, Ratbek & Levaggi, Rosella & Menoncin, Francesco, 2023. "Optimal tax enforcement with productive public inputs," Economic Modelling, Elsevier, vol. 126(C).
    7. Mesut Karakas & Taner Turan, 2019. "The Government Spending-Revenue Nexus in CEE Countries: Some Evidence for Asymmetric Effects," Prague Economic Papers, Prague University of Economics and Business, vol. 2019(6), pages 633-647.
    8. Xinshen DIAO & Terry L. ROE & A. Erinç YELDAN, 1999. "How Fiscal Mismanagement May Impede Trade Reform: Lessons From An Intertemporal, Multi-Sector General Equilibrium Model For Turkey," The Developing Economies, Institute of Developing Economies, vol. 37(1), pages 59-88, March.
    9. Christos Chrysanthakopoulos & Athanasios Tagkalakis, 2024. "Tax policy cyclicality and financial development," Economics and Business Letters, Oviedo University Press, vol. 13(1), pages 48-57.
    10. Éric Heyer & Xavier Timbeau, 2006. "Immobilier et politique monétaire," Revue de l'OFCE, Presses de Sciences-Po, vol. 96(1), pages 115-151.
    11. Audrey Desbonnet & Thomas Weitzenblum, 2012. "Why Do Governments End Up With Debt? Short-Run Effects Matter," Economic Inquiry, Western Economic Association International, vol. 50(4), pages 905-919, October.
    12. Alogoskoufis, George, 2021. "Historical cycles of the economy of modern Greece from 1821 to the present," LSE Research Online Documents on Economics 109848, London School of Economics and Political Science, LSE Library.
    13. Luca Andriani, 2012. "Tax Morale and Pro-Social Behavior: Evidence from a Palestinian Survey," Working Papers 712, Economic Research Forum, revised 2012.
    14. Dwenger, Nadja & Kleven, Henrik & Rasul, Imran & Rincke, Johannes, 2014. "Extrinsic vs Intrinsic Motivations for Tax Compliance. Evidence from a Randomized Field Experiment in Germany," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100389, Verein für Socialpolitik / German Economic Association.
    15. Lagadec, Gael & Descombels, Alain, 2009. "L'ombre de la crise [The shadow of the global crisis]," MPRA Paper 17871, University Library of Munich, Germany.
    16. Aygun Garayeva & Gulzar Tahirova, 2017. "Government Spending Effectiveness and the Quality of Fiscal Institutions," Business & Management Compass, University of Economics Varna, issue 2, pages 128-143.
    17. Alvaro Forteza & Cecilia Noboa, 2019. "Perceptions of institutional quality and justification of tax evasion," Constitutional Political Economy, Springer, vol. 30(4), pages 367-382, December.
    18. Mr. Evan C Tanner & Mr. Kevin J Carey, 2005. "The Perils of Tax Smoothing: Sustainable Fiscal Policy with Random Shocks to Permanent Output," IMF Working Papers 2005/207, International Monetary Fund.
    19. Pintér, Gábor, 2022. "The procyclicality of inflation-linked debt," Economics Letters, Elsevier, vol. 218(C).
    20. Vu, Trung V., 2021. "Do genetically fragmented societies respond less to global warming? Diversity and climate change policies," Energy Economics, Elsevier, vol. 104(C).
    21. Bayer, Ralph-C. & Hodler, Roland & Raschky, Paul A. & Strittmatter, Anthony, 2020. "Expropriations, property confiscations and new offshore entities: Evidence from the Panama Papers," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 132-152.
    22. Carsten Hefeker & Sebastian G. Kessing, 2017. "Competition for natural resources and the hold-up problem," Canadian Journal of Economics, Canadian Economics Association, vol. 50(3), pages 871-888, August.

    More about this item

    Keywords

    ;
    ;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

    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:irv:wpaper:080914. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Melissa Valdez (email available below). General contact details of provider: https://edirc.repec.org/data/deucius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.