Arbeitspapier
Tax avoidance and optimal income tax enforcement
We examine the optimal auditing problem of a tax authority when taxpayers can choose both to evade and avoid. For a convex penalty function the incentive-compatibility constraints may bind for the richest taxpayer and at a positive level of both evasion and avoidance. The audit function is non-increasing in reported income, and is higher for progressive tax functions than for regressive tax functions. Higher marginal tax rates increase the incentives for non-compliance, overturning the well-known Yitzhaki paradox.
- Language
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Englisch
- Bibliographic citation
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Series: IFS Working Papers ; No. W17/08
- Classification
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Wirtschaft
Tax Evasion and Avoidance
Illegal Behavior and the Enforcement of Law
Asymmetric and Private Information; Mechanism Design
Taxation and Subsidies: Efficiency; Optimal Taxation
- Subject
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Tax avoidance
Tax evasion
Optimal auditing
Tax administration
- Event
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Geistige Schöpfung
- (who)
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Gamannossi degl'Innocenti, Duccio
Rablen, Matthew D.
- Event
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Veröffentlichung
- (who)
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Institute for Fiscal Studies (IFS)
- (where)
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London
- (when)
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2017
- DOI
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doi:10.1920/WP.IFS.2017.1708
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Gamannossi degl'Innocenti, Duccio
- Rablen, Matthew D.
- Institute for Fiscal Studies (IFS)
Time of origin
- 2017
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