Optimal Tax Enforcement

.

Chapter 6 in The Elasticity of Taxable Income, 2022, pp 121-138 from Edward Elgar Publishing

Abstract: The question of optimal tax enforcement by revenue authorities has received relatively little attention. This chapter examines the joint problem of the optimal tax rate and optimal tax enforcement in an income tax context. This combines the elasticity of taxable income with an `enforcement elasticity of taxable income', defined with respect to an enforcement parameter that influences the cost of income concealment faced by individuals. Individuals maximises utility by making a choice about labour supply and the amount of income to conceal from the tax authorities, while the government selects the tax rate and an enforcement parameter to maximise a social welfare function displaying an explicit redistributive objective. The way in which the optimal compliance gap, defined as the proportional difference between the tax that should legally be paid and the amount actually paid, is affected by labour supply responses to tax enforcement is also examined.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/view/9781802209594.00014.xml (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable

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:elg:eechap:21391_6

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().