Reducing Current Taxes to Raise Future Revenue

Amihai Glazer

No 80914, Working Papers from University of California-Irvine, Department of Economics

Abstract: A government which raises taxes in the current period may induce workers to invest in finding ways to reduce their tax payments, and so may reduce the government's ability to raise revenue in the future. Therefore, a government that fears it may have to raise much revenue in the future may set taxes in the current period at a lower level than that which would maximize revenue, or that would maximize social welfare in that period.

Keywords: Tax evasion; Intertemporal taxation (search for similar items in EconPapers)
JEL-codes: H26 H60 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2008-12
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Persistent link: http://EconPapers.repec.org/RePEc:irv:wpaper:080914

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