Herding, rent-seeking taxpayers, and endemic corruption

Gil Epstein and Ira Gang

No wp-2022-162, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: In an environment with extensive corruption where much of the population evades paying their full taxes due, we tackle the question of optimal taxation when constituencies with opposing objectives (the poor and the rich) push tax policy in different directions. We think in terms of a government policy-maker, here called the tax administrator (TA), and rent-seeking lobbying efforts by poor and rich constituencies. We recognize taxpayers' inter-dependency as reflected in increased evasion likelihood when others are thought to be evading.

Keywords: Tax evasion; Corruption; Rent-seeking; Tax administration; Poor (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
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