Insights from a Tax-Systems Perspective

39 Pages Posted: 14 Oct 2013 Last revised: 30 Oct 2013

See all articles by Joel B. Slemrod

Joel B. Slemrod

University of Michigan, Stephen M. Ross School of Business; National Bureau of Economic Research (NBER)

Christian Gillitzer

University of Michigan, Stephen M. Ross School of Business

Date Written: October 1, 2013

Abstract

The tax-systems perspective considers a variety of costs and behavioral margins often ignored in standard tax analysis: administrative and compliance costs, evasion and avoidance behavior, and multiple non-rate tax-system instruments (e.g., withholding and public disclosure). We show how the standard optimal tax framework can be augmented to include these new sources of cost and behavioral response by considering some enduring tax policy questions: What is the optimal commodity tax base breadth? How does enforcement effort targeted to avoidance behavior affect optimal progressivity? What fraction of returns should be audited? Should small firms be excluded from a tax system?

Keywords: tax systems, evasion, avoidance

Suggested Citation

Slemrod, Joel B. and Gillitzer, Christian, Insights from a Tax-Systems Perspective (October 1, 2013). Ross School of Business Paper No. 1206. Available at SSRN: https://ssrn.com/abstract=2340048 or http://dx.doi.org/10.2139/ssrn.2340048

Joel B. Slemrod (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Room R5396
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National Bureau of Economic Research (NBER)

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Christian Gillitzer

University of Michigan, Stephen M. Ross School of Business

701 Tappan Street, Ross School of Business
University of Michigan
ANN ARBOR, MI MI 48104
United States

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