A note on optimal tax evasion in the presence of merit goods
In a recent article Davidson, Lawrence and Wilson propose a model showing that, in the presence of distortionary taxations and goods of different quality, tax evasion can be an optimal device. Here, we show that this result, although quite interesting, cannot be generalised to a framework where Government activity consists of supplying merit goods and levying taxes to finance their provision.
|Date of creation:||2007|
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