Optimal taxes on wealth and consumption in the presence of tax evasion

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis article incorporates tax evasion into an optimum taxation framework with individuals diering in earning abilities and initial wealth. We nd that despite the possibility of its evasion a tax on initial wealth should supplement the optimal nonlinear income tax, given a positive correlation between initial wealth and earning abilities. Further, even if income and initial wealth are taxed optimally, it is still desirable to levy a tax on commodities, though it can be evaded as well. Thus, our result provides a rationale for a comprehensive tax system. Optimal tax rates on commodities dier in general, however for the special case of a uniform evasion technology it turns out that equal rates are optimal if preferences are homothetic and weakly separable.

Macroeconomic determinants of tax revenue in economic community of West African states

“…Nonlinearity allows for a social planner who prefers, for example, more equal distributions of utility (Mankiw et al, 2009;Blundell, 2012). Other studies considered some salient aspect of optimal taxation theory, like its design in an open economy (Ogawa & Hosoe, 2020), marginal social welfare weighting (Saez & Stantcheva, 2016), accounting for the possibility of tax evasion (Brunner, Eckerstorfer & Pech, 2013;Artavanis, Morse & Tsoutsoura, 2016).…”

Analysis of the Effectiveness of the Voluntary Disclosure Program on Taxpayer Compliance at the Koja Pratama Tax Service Office in 2022

“…Argentina involved the OECD in implementing the tax amnesty, with the cooperation making it difficult for taxpayers to hide their assets abroad. The success of Argentina was also supported by clear regulations and sanctions, attractive tax rates, and high levels of public trust in their new government (Brunner et al, 2013;Jara et al, 2023;Revesz, 2020;Sørensen, 1994).…”

Optimal Taxation of Bequests in a Model with Initial Wealth*

“…Perhaps we can take the very existence of these taxes as an indication of a widely held view that enforceability is given to a sufficient degree. In a related work (Brunner et al. , 2010), we have analyzed the role of taxes on (inherited) wealth and expenditures in an optimal tax system if only partial observability is assumed (i.e., if we allow for tax evasion).…”