1,721,169 research outputs found
An evasive topic: theorizing about the hidden economy
Get PDFThis is a pre-copyedited, author-produced PDF of an article accepted for publication in International Tax and Public Finance, following peer review. The final publication International Tax and Public Finance 2012, 19(1):5-24 is available at Springer via DOI: 10.1007/s10797-011-9185-9 .This paper reviews some central issues that arise in theorizing about tax evasion
decisions and the hidden economy. It starts from the Allingham-Sandmo (1972) modelling of
the tax evasion decision as a choice under uncertainty based on expected utility maximization
and risk aversion. It goes on to discuss alternative specifications of the taxpayer’s preferences
with particular regard to the explanation of the extensive margin, i.e. the decision on whether
or not to engage in tax evasion. It extends the model to the case of variable labour supply with
work in both official and black labour markets. It then considers the application of the theory
to taxes on wealth and income from capital, indirect tax evasion and smuggling. It also
includes a consideration of general equilibrium effects and of the problems that evasion
causes for the theory of optimal income and commodity taxes. It concludes with a brief
discussion of the implications of tax evasion for economic policy in the welfare state
The Rate of Return and Personal Savings [The Rate of Return, Taxation and Personal Savings].
No full textPublic provision and private incentives
Get PDFThis paper surveys classical and modern arguments for public production and
provision of goods. It reviews the conventional case for public production under
conditions of increasing returns and discusses the modifications that have to be made
if public production involves a cost inefficiency. It then discusses the causes behind a
possible cost inefficiency, such as the difficulty of designing good incentive schemes
in agencies with multiple and complex objectives. An alternative to designing better incentives in the public sector is that of contracting out to private firms, and the
conditions favourable to this alternative are also discussed
Tax distortions and household production
No full textSIGLEAvailable from Bibliothek des Instituts fuer Weltwirtschaft, ZBW, Duesternbrook Weg 120, D-24105 Kiel C 143910 / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekDEGerman
Public goods and Pigouvian taxes
Get PDFThis paper consists of the text of two articles prepared for the second edition of the New
Palgrave Dictionary of Economics. The first article provides a mathematical and
diagrammatic exposition of the theory of public goods as originally formulated by Samuelson.
It describes the extension of the model to take account of the costs of distortionary taxation,
and discusses the concept of the marginal cost of public funds. Different types of public goods
(such as mixed goods and local and global public goods) are discussed before turning to a
survey of the incentive problems related to preference revelation. The second article considers
the use of taxes designed to correct for negative external effects. It sets out the basic
theoretical argument and considers the modifications that have to be made when these taxes
are seen in the context of an otherwise distortionary tax system. It also briefly considers the
issue of the ‘double dividend’ from a green tax reform
The early history of environmental economics
Get PDFThis paper considers economists’ treatment of problems related to the environment prior to the establishment of environmental economics as a separate field in the 1960s. In discussing the literature from the late 18th century onwards, it looks on the one hand for awareness in the work of the early economists of the effects of economic activity on the natural and social environment and of the feedback from the environment to the economy. On the other hand, it describes how economic theory developed in a way which made it increasingly relevant for the study of environmental issues and the design of economic policy
Globalisation and the welfare state : more inequality – less redistribution?
Get PDFThis paper considers the possible connection between globalisation and inequality in
Western welfare states. There are a number of theoretical reasons why increased trade
and factor mobility should lead to more inequality in rich countries. At the same time,
there are arguments why globalisation should also make it more difficult to
redistribute incomes in favour of low- income groups, and this squeeze would seem to
lead to severe difficulties for traditional welfare state policies. However, the empirical
evidence for such a squeeze varies considerably between countries, and it is suggested
that a richer framework than the standard competitive model is needed to understand the forces at work
Atmospheric Externalities and Environmental Taxation.
Get PDFThe paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.Environmental taxation; Public goods
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