We study experimentally how taxpayers choose between two taxregimes to fund a public good. The first-best tax regime imposes ageneral, distortion-free income tax. However, this tax cannot be enforced.The second-best alternative supplements the income tax by a specificcommodity tax. This tax...

We present an experimental study on the wasted resources associated with tax evasion. The waste arises from taxpayers and tax authorities, investing costly effort in concealment, respectively detect ion, of tax evasion. We show that (socially ineffcient) efforts depend positively on the...

In an overlapping generations-experiment with multiple families participants caneither support their parents directly and thereby reduce their tax burden or hopefor tax-financed old age support. State productivity is captured by the factor withwhich total tax revenues are multiplied to determine...

Citizen tax compliance significantly dictates governmental fiscal capacities. Recognizing this, understanding the determinants of tax compliance remains paramount. While existing literature frequently isolates and tests individual determinants such as audit likelihood, penalty structures, tax...

Auditing institutions, such as the German Federal Court of Audit (BRH), provide information on public revenue and public spending. The question of how to increase tax compliance has been of frequent interest. Unfortunately, information from German taxpayers? declaration behaviour (beyond the...

This paper estimates income tax underreporting for the case of Germany, by income category and along the income distribution. Comparing weighted samples of survey and tax data, we find patterns that are in line with the literature: Average income from self-employment and from rent and lease in...

What are the implications of (endogenous) directed technical change for the design of redistributive income taxes? I study this question in a Mirrleesian economy augmented to include endogenous technology development and adoption choices by firms. Under certain conditions, any progressive tax...

Are reforms towards individual taxation politically feasible? Are they desirable from a welfare perspective? We develop a method to answer such questions and apply it to the US federal income tax since the 1960s. Main findings are: As of today, Pareto-improvements require a move away from joint...

We study the optimal design of student financial aid as a function of parental income. We derive optimal financial aid formulas in a general model. For a simple model version, we derive mild conditions on primitives under which poorer students receive more aid even without distributional...

We study reforms of non-linear income tax systems from a political economy perspective. We present a median voter theorem for monotonic tax reforms, reforms so that the change in the tax burden is a monotonic function of income. We also provide an empirical analysis of tax reforms, with a focus...