Optimal Sales Tax Rebates and Tax Enforcement Consumers
We study an optimal commodity taxation problem and show that consumers have an important role as tax enforcers. Firms evade taxes by not issuing sales receipts. Requesting receipts is costly for buyers but forces ?rms to remit taxes to the government. To compensate buyers, the government o¤ers a tax rebate, which has a non-trivial income e¤ect and modi?es the traditional "Ramsey equation". Tax-enforcement policies a¤ect buyers?allocations directly and via the standard changes in the good?s price. The optimal policies depend on buyers? auditing and ?rms?concealment technologies. Welfare is higher if consumer auditing is the only tax enforcement policy.
|Date of creation:||Apr 2013|
|Date of revision:|
|Contact details of provider:|| Postal: 401 Sunset Avenue, Windsor, Ontario, N9B 3P4|
Phone: (519) 253-4232 ext 2368
Fax: (519) 973-7096
Web page: http://www.uwindsor.ca/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
- Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
- David Domeij, 2005. "Optimal Capital Taxation and Labor Market Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(3), pages 623-650, July.
- Raj Chetty & Adam Looney & Kory Kroft, 2007.
"Salience and Taxation: Theory and Evidence,"
NBER Working Papers
13330, National Bureau of Economic Research, Inc.
- Looney, Adam & Kroft, Kory & Chetty, Raj, 2009. "Salience and Taxation: Theory and Evidence," Scholarly Articles 9748525, Harvard University Department of Economics.
- Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and taxation: theory and evidence," Finance and Economics Discussion Series 2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Usher, Dan, 1986.
"Tax Evasion and the Marginal Cost of Public Funds,"
Western Economic Association International, vol. 24(4), pages 563-86, October.
- Robin Boadway & Nicolas Marceau & Steeve Mongrain, 2002. "Joint tax evasion," Canadian Journal of Economics, Canadian Economics Association, vol. 35(3), pages 417-435, August.
- Leslie Reinhorn, 2004.
"Dynamic optimal taxation with human capital,"
Money Macro and Finance (MMF) Research Group Conference 2003
77, Money Macro and Finance Research Group.
- Roger Gordon & Wei Li, 2005.
"Tax Structure in Developing Countries: Many Puzzles and a Possible Explanation,"
NBER Working Papers
11267, National Bureau of Economic Research, Inc.
- Gordon, Roger & Li, Wei, 2009. "Tax structures in developing countries: Many puzzles and a possible explanation," Journal of Public Economics, Elsevier, vol. 93(7-8), pages 855-866, August.
- Cremer, Helmuth & Gahvari, Firouz, 1993. "Tax evasion and optimal commodity taxation," Journal of Public Economics, Elsevier, vol. 50(2), pages 261-275, February.
- Blundell, Richard & Macurdy, Thomas, 1999.
"Labor supply: A review of alternative approaches,"
Handbook of Labor Economics,
in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 27, pages 1559-1695
- Marchese, Carla, 2006.
"Rewarding the consumer for curbing the evasion of commodity taxes?,"
POLIS Working Papers
72, Institute of Public Policy and Public Choice - POLIS.
- Carla Marchese, 2009. "Rewarding the Consumer for Curbing the Evasion of Commodity Taxes?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 65(4), pages 383-402, December.
- Robin Boadway & Firouz Gahvari, 2006.
"Optimal Taxation with Consumption Time as a Leisure or Labor Substitute,"
1068, Queen's University, Department of Economics.
- Boadway, Robin & Gahvari, Firouz, 2006. "Optimal taxation with consumption time as a leisure or labor substitute," Journal of Public Economics, Elsevier, vol. 90(10-11), pages 1851-1878, November.
- Vito Tanzi & Parthasarathi Shome, 1993. "A Primer on Tax Evasion," IMF Staff Papers, Palgrave Macmillan, vol. 40(4), pages 807-828, December.
- Firouz Gahvari, 2007. "On Optimal Commodity Taxes When Consumption Is Time Consuming," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(1), pages 1-27, 02.
- Kleven, Henrik Jacobsen, 2004. "Optimum taxation and the allocation of time," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 545-557, March.
- Slemrod, Joel, 2008. "Does It Matter Who Writes the Check to the Government? The Economics of Tax Remittance," National Tax Journal, National Tax Association, vol. 61(2), pages 251-75, June.
- Das-Gupta, Arindam & Gang, Ira N, 1996.
"A Comparison of Sales Taxes,"
Public Finance = Finances publiques,
, vol. 51(2), pages 217-25.
- Vito Tanzi & Parthasarathi Shome, 1993. "A Primeron Tax Evasion," IMF Working Papers 93/21, International Monetary Fund.
- Yitzhaki, Shlomo, 1974. "Income tax evasion: A theoretical analysis," Journal of Public Economics, Elsevier, vol. 3(2), pages 201-202, May.
- George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, Oxford University Press, vol. 94(4), pages 749-775.
- Robert E. Lucas Jr. & Nancy L. Stokey, 1982.
"Optimal Fiscal and Monetary Policy in an Economy Without Capital,"
532, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Lucas, Robert Jr. & Stokey, Nancy L., 1983. "Optimal fiscal and monetary policy in an economy without capital," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 55-93.
- Sandmo, Agnar, 1974. "A Note on the Structure of Optimal Taxation," American Economic Review, American Economic Association, vol. 64(4), pages 701-06, September.
- Colin C. Williams & Sara Nadin, 2012. "Tackling Undeclared Work in the European Union," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(2), pages 20-25, 07.
- Louis Kaplow, 1989.
"Optimal Taxation with Costly Enforcement and Evasion,"
NBER Working Papers
2996, National Bureau of Economic Research, Inc.
- Kaplow, Louis, 1990. "Optimal taxation with costly enforcement and evasion," Journal of Public Economics, Elsevier, vol. 43(2), pages 221-236, November.
- Murphy, Kristina, 2008. "Enforcing Tax Compliance: To Punish or Persuade?," Economic Analysis and Policy, Elsevier, vol. 38(1), pages 113-135, March.
- Juin-jen Chang & Ching-chong Lai, 2004. "Collaborative tax evasion and social norms: why deterrence does not work," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 344-368, April.
- Firouz Gahvari & C.C. Yang, 1993. "Optimal Commodity Taxation and Household Consumption Activities," Public Finance Review, SAGE Publishing, vol. 21(4), pages 479-487, October.
When requesting a correction, please mention this item's handle: RePEc:wis:wpaper:1302. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Trudeau)
If references are entirely missing, you can add them using this form.