In this paper I show that, in economies characterized by tax evasion and endogeneity of government spending, the qualitative characterization of the optimal factor income taxes depends on both these factors. In particular, the well known Chamley Judd result that, in the long run, tax rates on capital income should be zero is, in many cases, overturned. It is shown that the nature of tax evasion...

he editorial ‘‘The Future . . . to whom it belongs?’’1 raises wo considerations on our professional practice. The first one, stimulated by our colleague Marcio brahão, refers to the Brazilian tax burden. The National nion of Attorneys of the National Treasury estimates that he cost of the crime of tax evasion in Brazil in 2015 alone as more than R$ 420 billion -seven times more than the nnual c...

Since Feldstein (1999), the most widely used method of calculating the excess burden of income taxation is to estimate the e¤ect of tax rates on reported taxable income. Feldstein’s taxable income formula for deadweight loss implicitly assumes that the marginal social cost of evasion and avoidance equals the tax rate. This paper argues that this condition is likely to be violated in practice fo...

Domestic revenue mobilisation is key to sustainable development finance – only self-sufficiency will allow the development of fully-functioning states with flourishing systems of political representation and economies reflecting societies’ expressed preferences in regard to, for example, inequality. Tax evasion and tax avoidance are important insofar as they affect both the volume and nature of...

OBJECTIVES Several states, including California, have implemented large cigarette excise tax increases, which may encourage smokers to purchase their cigarettes in other lower taxed states, or from other lower or non-taxed sources. Such tax evasion thwarts tobacco control objectives and may cost the state substantial tax revenues. Thus, this study investigates the extent of tax evasion in the 6...

We study optimal dynamic tax evasion in the framework proposed by Lin and Yang (2001) and Dzhumashev and Gahramanov (2011) with somemodifications: a more flexible utility function, a more realistic audit process, and a penalty function which can be defined both on evaded income and evaded taxes. In the former case the elasticity between tax rate and tax evasion is positive, unless the subsisten...

We analyze income tax evasion dynamics in a standard model of statistical mechanics, the Ising model of ferromagnetism. However, in contrast to previous research, we use an inhomogeneous multi-dimensional Ising model where the local degrees of freedom (agents) are subject to a specific social temperature and coupled to external fields which govern their social behavior. This new modeling frame ...

Since Feldstein (1999), the most widely used method of calculating the excess burden of income taxation is to estimate the e¤ect of tax rates on reported taxable income. Feldstein’s taxable income formula for deadweight loss implicitly assumes that the marginal social cost of evasion and avoidance equals the tax rate. This paper argues that this condition is likely to be violated in practice fo...