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Taxpayer deductions and the endogenous probability of tax penalisation

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  • Alex A. T. Rathke

Abstract

We propose a parametric specification of the probability of tax penalisation faced by a taxpayer, based on the amount of deduction chosen by her to reduce total taxation. Comparative analyses lead to a closed-form solution for the optimum tax deduction, and provide the maximising conditions with respect to the probability parameters.

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  • Alex A. T. Rathke, 2022. "Taxpayer deductions and the endogenous probability of tax penalisation," Papers 2202.13695, arXiv.org.
    • Handle: RePEc:arx:papers:2202.13695
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    References listed on IDEAS

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    1. Srinivasan, T. N., 1973. "Tax evasion: A model," Journal of Public Economics, Elsevier, vol. 2(4), pages 339-346.
    2. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    3. James Alm & Antoine Malézieux, 2021. "40 years of tax evasion games: a meta-analysis," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 699-750, September.
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