Ueng, K. L. Glen; Wu, Chiaen J. - In: Economics Bulletin 29 (2009) 1, pp. 312-318
In a tax-evasion model with profit tax, we reexamine and clarify the issues of neutrality and separability with imperfect detection of tax fraud. With this more realistic setting, we show that the profit tax is not necessarily neutral and the separability conclusion may not hold. Furthermore,...