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Title:Optimal observability in a linear income tax PDF Logo
Authors:Slemrod, Joel
Traxler, Christian
Issue Date:2010
Series/Report no.:Preprints of the Max Planck Institute for Research on Collective Goods 2010,04
Abstract:We study the optimal observability of the tax base within the standard linear income tax problem, where observability is determined by the government’s investment into the accurate measurement of the tax base. We characterize the optimal level of observability and derive a new expression for the optimal progressivity, which in addition to the standard equity efficiency trade-off accounts for the limited accuracy of an income tax system.
Subjects:optimal linear income taxation
observability
tax enforcement
JEL:H21
H11
D8
Document Type:Working Paper
Appears in Collections:Preprints of the Max Planck Institute for Research on Collective Goods

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