Tax Administration and Tax Systems
IEB Working Paper 2015/3
30 Pages Posted: 28 Apr 2017
Date Written: March 19, 2015
This is a review of the so-called "Optimal tax systems" approach to the economic analysis of taxation. This approach acknowledges the bunch of instruments the public sector has to collect revenues, but also the multiple responses of taxpayers to them. In a way, this is a more realistic approach to taxation, and so should provide reliable guides to action.
MAIN RESULT: It stresses the importance of a Tax-systems approach in contrast with the tradition optimal taxation approach.
This approach consists of three blocks: multiple sources of cost of taxation (compliance, administrative and deadweight loss), multiple responses to taxes (not only behavioral) and a bunch of instruments (not only statutory parameters). The future of this integrated approach to taxation will be very much influenced by the foreseen information revolution.
Keywords: Optimal taxation, tax administration, multiple behavioral responses
JEL Classification: H20
Suggested Citation: Suggested Citation