Three Essays in Optimal Tax Enforcement Theory.

optimal tax enforcement;Economics;Business and Economics;Economics

Paramonova, YuliaHines, Jr James ;

University of Michigan

关键词: optimal tax enforcement;    Economics;    Business and Economics;    Economics;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/113615/yparamon_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

This dissertation advances the existing tax enforcement theory by determining the optimal use of third-party information reporting and by examining the effectiveness of collateral tax sanctions. Chapter 1 extends optimal tax-system theory by modeling information reporting as an additional enforcement instrument that allows the tax authority to acquire signals about taxpayers;; incomes. Therefore, the model allows the tax authority to not only audit a taxpayer, but also to acquire a signal about taxpayer’s income. I rigorously characterize the optimal allocation of resources between audits and information reporting when the enforcement budget is limited. I show that the optimal level of information reporting is an inverse U-shaped function of the budget, which implies that at some point it may not be optimal to expand information reporting.Chapter 2 and 3 propose new rationales for the use collateral tax sanctions – such as suspension of a driver;;s license or revocation of a passport -- for tax enforcement. Chapter 2 proposes that by affecting consumption and providing enforcement targeted to a group, collateral sanctions may allow the government to impose punishment correlated with an individual;;s earning potential. Such punishment makes the effective tax rates correlated with the individual’s earning potential and enables achieving the redistribution of income more effectively. I show that using a collateral sanction increases social welfare when the earning potential of the poorest individual in the targeted group is sufficiently higher than the earning potential of the poorest individual in the rest of the population.Chapter 3 applies collateral sanctions to the context tax debt collection. I develop a dynamic model, where a debtor may not pay tax debt because of income constraints or because of high chances to escape from the collection process. I show that when debtors are heterogeneous in their ability to escape tax debt, it may be optimal to use a collateral sanction in addition to a monetary fine. In contrast to the monetary fine that can be delayed and paid only when the tax debt is collected, the collateral sanction applies and influences immediately. This shows the importance of the timing of a penalty.