This paper studies the design of tax systems that implement a planner’s second-best allocation in a market economy. An … example shows that the widely used Mirrleesian (1976) tax system cannot implement all incentive-compatible allocations … one tax system. However, this tax system is often undesirable since it severely restricts the choice space of agents in …

We provide experimental evidence on the emergence of redistributive societies. Individuals first vote on redistribution … the time when they choose a distribution rule and find that there is more redistribution behind a veil of ignorance than … under full information. However, the scope of redistribution is less sensitive towards the degree of uncertainty than …

This paper presents the properties of optimal piecewise linear tax systems for two-earner households, based on joint …

We examine the role of tax incentives, tax awareness, and complexity in tax evasion. We observe a specific type of tax … evasion among business owners in Swedish administrative panel data, after the tax authority has approved all tax returns. For … the period 2006–2009, approximately 5% of tax returns overstate a claimed dividend allowance. Tax awareness decreases and …

This paper studies the effect of Finnish tax reforms in the mid 1990s on the economic activity and tax avoidance … decisions of the owners of small businesses. The reforms reduced income tax rates and increased tax planning incentives for … results imply that entrepreneurs react to tax incentives along both real and avoidance margins, while the latter elasticity is …

the joint determination of the non-linear monitoring and tax schedules and the conditions under which these can be … implemented. Monitoring of labor effort reduces the distortions created by income taxation and raises optimal marginal tax rates …, possibly above 100 percent. The optimal intensity of monitoring increases with the marginal tax rate and the labor …

apply a dynamic simulation model with overlapping generations where single and married agents have to decide on labor supply …

, the tax base. A higher taxable income, in turn, can make tax evasion more attractive. We show for various specifications … of preferences that the tax base effect generally dominates. Consequently, relative consumption effects tend to reduce … tax evasion. This is true, irrespective of whether tax parameters are exogenous, guarantee a balanced budget or are set …

This paper analyzes the sources of heterogeneity in legal tax avoidance strategies across individuals. Three conditions … are required for a taxpayer to participate in tax avoidance: incentive, access, and awareness. Using rich Swedish … administrative panel data with a unique link between corporate and individual tax returns, we analyze individual participation in …