Recent studies have questioned the empirical relevance and normative validity of the traditional prescriptions for optimal taxation based on Ramsey's original in sights. The present authors analyze governments that maximize net political benefits, which only imperfectly represent net social...

We extend the standard, one-period model of tax evasion to an inter-temporal framework in which an expected-utility-maximizing taxpayer updates expectations about the probability of a future audit based on past audit experience. This framework provides a theoretical grounding for the empirical...