The optimal audit policy is analysed for an independent revenue service when a social custom exists that rewards honest tax-paying. The implication of the existence of the social custom is that in equilibrium the income level of a taxpayer cannot always be inferred exactly from their report. The...

This paper investigates the role of taxation when public goods are privately provided.

The primary objective of this paper is to analyse the role of evasion possibilities as a determinant of the general structure of commodity and income taxes and of public goods supply. A secondary objective is to provide a defence of differentiated commodity taxes based on the screening role of...

Income-based targeting (or means-testing) reduces social security benefits as income rises. This form of targeting entails a well-known incentive distortion; the prospect for the recipients of losing part of their benefits if they were to earn more can deter them to work harder. In this paper,...

We consider a tax enforcement game in which the fiscal authority cannot pre-commit to an inspection policy and its interaction with the taxpayer is modelled as a signalling game. We extend earlier work by allowing for imperfect auditing, non-linear taxation and non-linear penalties. Using the...

The paper shows how the differing incidence of specific and ad valorem taxation in imperfectly competitive markest can be exploited to control international oligopoly. If countries act cooperatively, the tax instruments used in combination achieve the same outcome, either the first-best or the...