Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/323453 
Year of Publication: 
2024
Citation: 
[Journal:] Journal of Economic Interaction and Coordination [ISSN:] 1860-7128 [Volume:] 20 [Issue:] 3 [Publisher:] Springer Berlin Heidelberg [Place:] Berlin/Heidelberg [Year:] 2024 [Pages:] 643-658
Publisher: 
Springer Berlin Heidelberg, Berlin/Heidelberg
Abstract: 
Abstract We develop a tractable model economy in which public capital improves aggregate productivity, and the taxpayers have heterogeneous evasion opportunities. By issuing bonds, compliant taxpayers supply the evaders with an instrument to hedge against auditing risks, thereby expanding their evasion capacity. The wealth share of tax evaders relates negatively to the economy’s productivity but has a hump-shaped relationship with the growth rate of aggregate capital. The fiscal policy that maximizes welfare differs from the one that maximizes tax revenues because the latter does not account for the redistribution of wealth (and risk) between compliant and evasive taxpayers.
Subjects: 
Dynamic tax evasion
General equilibrium
Growth
Heterogeneous agents
Persistent Identifier of the first edition: 
Additional Information: 
E20;G11;H26
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version
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