Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/75761
Authors: 
Richter, Wolfram F.
Boadway, Robin
Year of Publication: 
2001
Series/Report no.: 
CESifo Working Paper 505
Abstract: 
Tax evasion is modeled as a risky activity and integrated into a standard problem of optimal tax design. It is shown that there is a trade off between reducing tax evasion and reducing tax distortion. Thus it is efficient to supplement a broad-based wage tax by a tax on specific consumption if the former is evaded and the latter not. The optimal tax structure can be characterized by an explicit formula.
Subjects: 
Tax evasion
risk-taking
optimal taxation
Document Type: 
Working Paper

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