Merit goods provision and optimal tax evasion

Rosella Levaggi and Francesco Menoncin ()

Economics Bulletin, 2008, vol. 8, issue 7, 1-3

Abstract: In a recent article Davidson, Lawrence and Wilson propose a model showing that, in the presence of distortionary taxation and goods of different quality, tax evasion can be an optimal device. Here, we show that this result, although quite interesting, cannot be generalised to a framework where Government activity consists of supplying merit goods and levying taxes to finance their provision.

JEL-codes: H2 H4 (search for similar items in EconPapers)
Date: 2008-09-26
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