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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18875
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| Title: | | Measuring tax efficiency : a tax optimality index  |
| Authors: | | Raimondos-Møller, Pascalis Woodland, Alan D. |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1236 |
| Abstract: | | This paper introduces an index of tax optimality that measures the distance of a current tax structure from the optimal tax structure in the presence of public goods. In doing so, we derive a [0, 1] number that reveals immediately how far the current tax configuration is from the optimal one and, thereby, the degree of efficiency of a tax system. We call this number the Tax Optimality Index. We show how the basic method can be altered in order to derive a revenue equivalent uniform tax, which measures the size of the public sector. A numerical example is used to illustrate the method developed. |
| Subjects: | | tax optimality index excess burden distance function |
| JEL: | | H41 H21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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