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TAX EVASION AND THE MARGINAL COST OF PUBLIC FUNDS
Author(s) -
USHER DAN
Publication year - 1986
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1986.tb01834.x
Subject(s) - deadweight loss , economics , marginal cost , liberian dollar , evasion (ethics) , public finance , microeconomics , revenue , marginal profit , monetary economics , welfare , finance , macroeconomics , market economy , immune system , immunology , biology
Tax evasion and deadweight loss have similar implications for the rules of public finance. The optimal mix of taxes can be derived from the minimization of the sum of aggregate deadweight loss and aggregate cost of tax evasion. Similarly, the marginal cost of public funds includes allowances for marginal deadweight loss and marginal cost of tax evasion per dollar of public revenue acquired.