Skip to main content

Tax Evasion and the Time Consistency of the Government's Income Tax Policy

Buy Article:

$43.00 plus tax (Refund Policy)

It is shown that it is not necessarily optimal for the government to tax capital income at a high rate even when capital is in fixed supply because the supply of capital for tax purposes may be elastic if capital income tax evasion occurs. An example is given where the wage tax rate is positive and greater than the interest income tax rate even though capital is in fixed supply. Conditions are also derived under which the capital income tax rate is lower in the closed-loop policy game, where capital is fixed, than in the open-loop game, where it is not.

JEL Classification Numbers: E61, H26.
No References
No Citations
No Supplementary Data
No Article Media
No Metrics

Document Type: Research Article

Affiliations: Washington State University

Publication date: 01 June 1999

  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more