Does higher tax morale imply higher optimal labor income tax rate?

Andras Simonovits ()
Additional contact information
Andras Simonovits: Institute of Economics, Research Center for Economic and Regional Studies, Hungarian Academy of Sciences, also Institute of Mathematics, Budapest University of Technology and Economics also Department of Economics, CEU

No 1218, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We analyze the impact of tax morale on the optimal progressive labor income taxation. Only universal basic income is financed from a linear 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. Limiting the utilitarianism to the poorer parts of the population (defined by the inclusion share), the optimal tax rate is an increasing function of the tax morale and a decreasing function of the inclusion share, provide that the average wage of the included is higher than 0.54 times the average wage.

Keywords: tax morale; progressive income tax; undeclared earning; labor supply; income redistribution (search for similar items in EconPapers)
JEL-codes: D58 H21 H26 H41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2012-04
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://econ.core.hu/file/download/mtdp/MTDP1218.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to econ.core.hu:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:1218

Access Statistics for this paper

More papers in CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies Contact information at EDIRC.
Bibliographic data for series maintained by Nora Horvath ( this e-mail address is bad, please contact ).