Resource title

Stricter enforcement may increase tax evasion

Resource image

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Resource description

This paper shows that stricter enforcement may increase tax evasion. Individuals vote on a linear income tax which is used to finance lump sum transfers. Stricter enforcement may make redistributive taxation more attractive to the decisive voter. The tax rate and transfer may rise which in turn may increase tax evasion. An example shows that this result can actually occur. The paper also discusses the interaction between voting on taxes and the choice of audit rate by a budget maximizing bureaucrat.

Resource author

Rainald Borck

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18281

Resource license

Adapt according to the presented license agreement and reference the original author.