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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- Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
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9904, Department of Economics, University of Victoria.
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3451400, Harvard University Department of Economics.
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Brookings Papers on Economic Activity,
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- Svensson, Jakob, 1998. "Investment, property rights and political instability: Theory and evidence," European Economic Review, Elsevier, vol. 42(7), pages 1317-1341, July.
- Bruno Frey & Friedrich Schneider, 2000. "Informal and underground economy," Economics working papers 2000-04, Department of Economics, Johannes Kepler University Linz, Austria.
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