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Title:Tax morale and optimal taxation PDF Logo
Authors:Gueth, Werner
Sausgruber, Rupert
Issue Date:2004
Series/Report no.:CESifo working papers 1284
Abstract:We study experimentally how taxpayers choose between two tax regimes to fund a public good. The first-best tax regime imposes a general, distortion-free income tax. However, this tax cannot be enforced. The second-best alternative supplements the income tax by a specific commodity tax. This tax cannot be evaded but distorts optimal consumption choices, instead. The result is that a large majority of subjects prefer the general income tax regime. The bulk of votes is consistent with actual payoffs. We isolate tax morale as cause for payoffs above theoretical predictions.
Subjects:optimal taxation
tax evasion
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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