Constrained Efficient Fine‐cum‐Tax Rate Structures

The Case of Constant Relative Risk Aversion

Dados Bibliográficos

ID9727183
AutoresK L Glen Ueng (0000-0002-5688-6782, National Chengchi University), C C Yang (0000-0002-3476-3802), Cheng Yang (0000-0002-2497-7014, Institute of Economics, Academia Sinica)
Ano2004
Volume71
Fascículo283
Páginas461-482
Data de publicação2004-08-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoEconomica (JOURNAL)
Identificadores do periódicoISSN: 0013-0427 • E-ISSN: 1468-0335
EditoraWiley (PUBLISHER • GB)
DOI10.1111/j.0013-0427.2004.00380.x
OpenAlexW2035872617
IdiomaEN
Citações recebidas1
Referências citadas25

This paper explores the possibility that fines and tax rates impose different welfare costs on different types of taxpayer, so that the government may want to apply different fine/tax rate treatments to different types of taxpayer. Under the assumption that taxpayers exhibit constant relative risk aversion, we characterize the constrained Pareto‐efficient fine/tax rate structure, showing that: (i) the co‐existence of compliers (the above‐ground economy) and evaders (the underground economy) is typical at the Pareto optimum, and (ii) Pareto efficiency requires compliers to face tax rates no higher and fines no lower than those faced by evaders

Constant (computer programming) · Econometrics · Economics · Expected utility hypothesis · Government (linguistics) · Macroeconomics · Market economy · Mathematical economics · Microeconomics · Monetary economics · Operations management · Optimal tax · Pareto principle · Public economics · Risk aversion (psychology) · Tax rate · Taxpayer · Welfare · Computer Science · Financial Literacy, Pension, Retirement Analysis · Fiscal Policy and Economic Growth · Taxation and Compliance Studies

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