This paper analyzes how income taxation affects optimal law enforcement. A key insight of the analysis is that if monetary sanctions are deductible, income taxation is equivalent to increasing offenders' wealth. This implies, for example, that income taxation reduces the social costs of crime...

This paper explores the effects of public enforcement, in general, and punishment, in particular, on crime levels if offenders can engage in avoidance activities. Avoidance reduces the probability or magnitude of punishment. In general, offenders can reduce their expected punishment either by...

Economic models of income-producing crimes are usually formulated as a labor supply decision (or a portfolio problem) under uncertainty. As such they are easily susceptible to income taxation. This paper incorporates the theory of the taxation of risk taking into such a model to derive results...

The existing literature on the effects of taxation on income-producing crimes lays claim to several important implications: first, that a pure income tax regime maintains the (efficient) level of crime with respect to risk neutral offenders; second, that the current U.S. income tax laws under...