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- Title
Optimal Nonlinear Income Taxation with Costly Tax Avoidance.
- Authors
Grochulski, Borys
- Abstract
The article discusses optimal income taxation in a situation where agents hide income to avoid taxation. Using the James Mirrlees approach to optimal taxation, where an optimal tax system implements the best outcomes under limited government information, the article studies optimal taxation where the government can only observe the income that agents display. The study shows that as the cost of concealment increases with income, it is optimal to tax higher income at a higher marginal rate.
- Subjects
INCOME tax; MIRRLEES, James, 1936-2018; FALSIFICATION; FRAUD; INCOME; TAX research
- Publication
Economic Quarterly (10697225), 2007, Vol 93, Issue 1, p77
- ISSN
1069-7225
- Publication type
Article