Tax compliance has been studied in economics by analysing the individual decision of a representative person between paying and evading taxes. A neglected aspect of tax compliance is the interaction of taxpayers and tax authorities. The relationship between the two actors can be understood as an...

This note reports on the results from a small scale investigation of the compliance effects of a costly pre-audit on tax compliance. The tax compliance game is modeled in three parts: a declaration phase, a pre-selection phase with a cost for taxpayers, and an audit selection phase where all...

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

AbstractThis paper revisits optimal tax enforcement policy, focusing on two elements of that policy: (1) the optimal mix of government-level tax administration and individual-level tax compliance; and (2) the optimal mix of this combination (together, tax enforcement) and tax rates. The standard...

We analyze the impact of tax morale on the optimal progressive labor income taxation. Only universal basic income is financed from a linear tax and the financing of public goods is neglected. Each individual supplies labor and (un)declares earning, depending on his labor disutility and tax...

Since Sandmo (1981), many articles have analyzed optimal fiscal policies in economies with tax evasion. All share a feature: they assume that the cost of enforcing the tax law is exogenous. However, governments often invest resources to reduce these enforcement costs. In a very simple model, we...

Tax authorities around the world are increasingly employing data mining and machine learning algorithms to predict individual behaviour. Although the traditional literature on optimal tax adminis- tration provides useful tools for ex-post evaluation of policies, it dis- regards the problem of...