Reducing Current Taxes to Raise Future Revenue
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.
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- Christina D. Romer & David H. Romer, 2009.
"Do Tax Cuts Starve the Beast? The Effect of Tax Changes on Government Spending,"
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- Bruno Frey & Friedrich Schneider, 2000. "Informal and underground economy," Economics working papers 2000-04, Department of Economics, Johannes Kepler University Linz, Austria.
- Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
- David Giles & Patrick Caragata, 2001.
"The learning path of the hidden economy: the tax burden and tax evasion in New Zealand,"
Taylor & Francis Journals, vol. 33(14), pages 1857-1867.
- David E. A. Giles, & Patrick J. Caragata, 1999. "The Learning Path of the Hidden Economy: The Tax Burden and Tax Evasion in New Zealand," Econometrics Working Papers 9904, Department of Economics, University of Victoria.
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