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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

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    File URL: https://www.economics.uci.edu/files/docs/workingpapers/2008-09/glazer-14.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

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

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