The Optimal Structure of Commodity Taxation in a Monopoly with Tax Avoidance or Evasion

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Dateien:
Aufrufstatistik

URI: http://nbn-resolving.de/urn:nbn:de:bsz:21-opus-56027
http://hdl.handle.net/10900/47846
Dokumentart: ResearchPaper
Date: 2011
Source: University of Tübingen Working Papers in Economics and Finance ; 8
Language: English
Faculty: 6 Wirtschafts- und Sozialwissenschaftliche Fakultät
Department: Wirtschaftswissenschaften
DDC Classifikation: 330 - Economics
Keywords: Steuer
Other Keywords:
Ad valorem tax , Monopoly , Output , Tax avoidance , Tax evasion , Specific tax
License: Publishing license excluding print on demand
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Abstract:

If tax obligations are met, the balanced-budget substitution of an ad valorem tax on output for a specific tax not only raises a monopolist's production, but also represents a Pareto improvement. However, if tax avoidance or evasion is feasible and the marginal costs of such actions decline with the legal tax burden, a monopolist will respond to a balanced-budget substitution of an ad valorem tax for a specific tax by reducing output, while profits remain constant. Therefore, in the presence of tax avoidance or evasion activities a move towards specific taxation can represent a Pareto improvement.

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