Resource title

Measuring tax efficiency : a tax optimality index

Resource image

image for OpenScout resource :: Measuring tax efficiency : a tax optimality index

Resource description

This paper introduces an index of tax optimality that measures the distance of a current tax structure from the optimal tax structure in the presence of public goods. In doing so, we derive a [0, 1] number that reveals immediately how far the current tax configuration is from the optimal one and, thereby, the degree of efficiency of a tax system. We call this number the Tax Optimality Index. We show how the basic method can be altered in order to derive a revenue equivalent uniform tax, which measures the size of the public sector. A numerical example is used to illustrate the method developed.

Resource author

Pascalis Raimondos-Møller, Alan D. Woodland

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18875

Resource license

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