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http://hdl.handle.net/10419/56192
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| Title: | | The distributional component of the price of the tax avoidance service  |
| Authors: | | Damjanovic, Tatiana |
| Issue Date: | | 2002 |
| Series/Report no.: | | SSE/EFI Working Paper Series in Economics and Finance 454 |
| Abstract: | | The traditional avoidance literature undeservedly neglects tax base distribution as a factor affecting the avoidance price, and generally assumed to be equal to the avoidance cost. In reality, avoidance providers are usually either high-skilled specialists or insiders. The strong collusion thus, naturally seems to be an assumption of the behavior of avoidance providers. Within such a framework, income distribution, which forms an avoidance demand together with tax codes, plays a very essential roll for the outcome of both avoidance price and quantity. My article models an economy with a monopolistic avoidance provider and imperfect information, and illustrates possible consequences of tax base changes. The paper examines the relationship between inequality and a government's ability to collect tax revenue, and also considers the possible outcome of a tax base broadening. Furthermore, it provides an additional explanation for the secession decision. |
| Subjects: | | Tax avoidance optimal taxation income distribution endogenous prices inequality tax base broadening secession |
| JEL: | | C72 D31 D42 D43 D69 D82 E61 E65 F15 G28 G29 H21 H24 H25 H31 H32 J61 K34 L12 O17 |
| Document Type: | | Working Paper |
| Appears in Collections: | | SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics
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