Investments in fiscal capacity—economic institutions for tax compliance—are an important feature of economic development. This paper develops a dynamic model to study the evolution of over time. We contrast a social planner’s investment path with politically feasible paths. Three types of states emerge in the long run: a commoninterest state where public resources are devoted to public goods, a...

We use a firm-CEO assignment framework to model the market for CEO effective labor. In the model’s equilibrium more talented CEOs match with and supply more effort to larger firms. Taxation of CEO incomes affects the equilibrium pricing of CEO effective labor and, hence, spills over and affects firm profits. Absent the ability to tax profits or a direct concern for firm owners, a standard presc...

This paper examines optimal income tax progressivity when avoidance responses to taxation are important, and can be controlled at some cost by the government. A simple example shows that ignoring the fact that avoidance can be controlled that the leak in Okun’s bucket can be fixed can lead to misleading implications about the optimal degree of tax rate progressivity. The paper then generalizes ...

T he main aim of this paper is analyzing the relationship between tax evasion and the monitoring expenditure on tax collectionin Iran. For doing so, we have used a simulation model for determining optimal level of monitoring expenses on tax collection. The results showed that, a greater portion of government expenses must be allocated to monitor the tax collection, although do this reduces...

In this paper, we present findings from the first ever study, to our knowledge, focus in detail on public attitudes an annual wealth tax. We start with a brief review of relevant recent studies before outlining mixed methods used, which involved nationally representative survey 2,243 members general and four groups conducted during summer 2020. The study aimed measure, explore explain overall l...

In this paper we analyse the stabilisation properties of distortionary taxes in a New Keynesian model with overlapping generations of finitely-lived consumers. In this framework, government debt is part of net wealth and this adds a number of interesting channels through which fiscal policy could affect output and inflation. Output volatility, in presence of technology shocks, is not substantia...