In this note we model the individual decision on income underreporting in a system with a negative income tax. We show that a change in the tax rate has opposing effects on the compliance behavior of the poor and the rich.

The share of indirect taxes in tax revenues, specifically consumption taxes, is quite high in Turkey when compared to other OECD economies. This emphasis on indirect taxes in Turkey, as well as other developing economies, is argued to emerge from the inability of the government to collect direct...

In this note we model the individual decision on income underreporting in a system with a negative income tax. We show that a change in the tax rate has opposing effects on the compliance behavior of the poor and the rich.

In this article, we analyze a state-contingent tax on capital gains. We start by focusing on Auerbach's (1991) retrospective capital gains tax device. Although this system is equivalent to an accrual method from an ex-ante perspective, it is not on an ex-post basis. As recognized by Auerbach,...

We examine peer effects in a tax-evasion experiment where subjects receive either advice or compliance data from participants with either above-median or below-median compliance rates in a control treatment. Both types of information on peer behavior yield significantly lower compliance rates...

There has been much discourse in the public media about the quality of and effectiveness of government spending in Jamaica. However to put in context and do a comparative analysis should serve to highlight critical discourse analysis and thinking rather than speaking to hyperbolic political...

The paper finds that sufficient ambiguity leads to the uniqueness of equilibrium in macroeconomic coordination games. The results have a Keynesian flavour: sufficient optimism gives rise to a Pareto-optimal equilibrium; and sufficient pessimism results in a Pareto-inferior equilibrium. This...

In this article, polarization measurement is presented as a useful tool for characterizing the net transfers of income between individuals caused by a tax reform. The bipolarization measure, which considers just two poles and involves the disappearance of the middle class, may complement...

We construct an overlapping-generations experiment to test for two alleged departures from Ricardian equivalence. In the first treatment the setting is close to the theoretical model, while in the second we allow for liquidity-constrained consumers. We then introduce uncertainty on future income...

In this paper, we propose two alternative formulations of representative consumer¡¯s endogenous time preference that depends on consumption as well as wealth and/or revenue. We solve one of these formulations and apply it to study the effectiveness of fiscal policies in a small open...