Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76329
Authors: 
Macho-Stadler, Ines
Pérez-Castrillo, David
Year of Publication: 
2002
Series/Report no.: 
CESifo Working Paper 814
Abstract: 
It is often argued that even if optimal ex-post, settlement dilutes deterrence ex-ante. We analyze the interest for the tax authority of committing, ex-ante, to a settlement strategy. We show that to commit to the use of settlements is ex-ante optimal when the tax authority receives signals that provide statistical information about the taxpayers' true tax liability. The more informative the signal, the larger the additional expected revenue raised by the tax authority when using settlement as a policy tool.
Subjects: 
enforcement of the law
settlement
tax evasion
Document Type: 
Working Paper

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