Punishment and Grace: On the Economics of Permanent Amnesties
Public Finance/Finances Publiques, vol. 3, 1996, pp. 353-368
18 Pages Posted: 19 Jun 2020
Date Written: April 18, 1996
This paper extends the literature on tax amnesties by considering two special grace programmes. The first is an offer by the government not to investigate taxpayers' accounts, the second not to prosecute indicted evaders. I analyse the impact of both measures on the taxpayers' optimal behavior and the government's net revenue, and derive the conditions under which it would be desirable to implement them on a permanent basis.
Keywords: tax evasion, tax amnesty
JEL Classification: H26, K42
Suggested Citation: Suggested Citation