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Optimal income taxation without tax evasion
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-9466-4876
2023 (English)Report (Refereed)
Abstract [en]

This paper is the first to integrate corruption with respect to tax collection in a Mirrleesian model of optimal redistributive taxation. The analysis starts with a simple two-type model, showing that the optimal marginal tax structure resembles that of the original Stiglitz (1982) model, albeit for different reasons. We also extend the analysis to a framework with many types and present policy rules for marginal taxation over the whole ability distribution. The marginal income tax rates are all non-negative and can be expressed in terms of two key determinants: the distributional weights attached to taxpayers, and how the private cost to evade taxes varies with the taxpayers' income. Finally, we consider the role of government expenditures directly targeting the incentives of the tax collector, such that these public expenditures and the optimal tax structure are implemented simultaneously.

Place, publisher, year, edition, pages
Umeå University, 2023. , p. 28article id 1020
Series
Umeå economic studies, ISSN 0348-1018 ; 1020
Keywords [en]
Redistribution, taxation, corruption.
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-222598OAI: oai:DiVA.org:umu-222598DiVA, id: diva2:1846251
Available from: 2024-03-21 Created: 2024-03-21 Last updated: 2024-03-22Bibliographically approved

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Aronsson, ThomasXu, Fei

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CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf