-seeking preferences justify heavier taxation of income because this serves to internalise the negative externality that the pursuit of … status imposes on others. In a model where status depends on both income and effort, we show that the optimal corrective tax … function in such a model, and discuss potential implications for optimal income taxation. …

This paper provides a general equilibrium model of income tax evasion. As functions of the share of income reported …, the paper contributes an analytic derivation of the tax elasticity of taxable income, the welfare cost of the tax, and … increase in magnitude by more than with zero evasion. Keeping constant the ratio of income tax revenue to output, as shown to …