Higher tax morale implies a higher optimal income tax rate

Arbeitspapier

We analyze the impact of (exogenous) tax morale on the optimal design of progressive income taxation. In our model, only universal basic income (transfer) is financed from a linear income tax and the financing of public goods is neglected. Each individual supplies labor and (un)declares earning, depending on his labor disutility and tax morale, respectively. Limiting the utilitarianism to the poorer parts of the population (defined by the welfare share), the optimal tax rate is an increasing function of the tax morale and a decreasing function of the welfare share.

Object Details

• ISBN: 978-615-5024-76-4
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IEHAS Discussion Papers ; No. MT-DP - 2011/37

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Tax Evasion and Avoidance ; Public Goods ; Computable and Other Applied General Equilibrium Models
• Subject: tax morale ; progressive income tax ; undeclared earning ; labor supply ; income redistribution ; Steuermoral ; Wirkungsanalyse ; Steuerprogression ; Einkommensteuer ; Arbeitsangebot ; Soziale Wohlfahrtsfunktion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Simonovits, András
• Event: Veröffentlichung
• (who): Hungarian Academy of Sciences, Institute of Economics
• (where): Budapest
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/108241
• Last update: 10.03.2025, 11:41 AM CET