Optimal Tax Administration
Author | : Mr.Michael Keen |
Publisher | : International Monetary Fund |
Total Pages | : 27 |
Release | : 2017-01-20 |
ISBN-10 | : 9781475570304 |
ISBN-13 | : 1475570309 |
Rating | : 4/5 (04 Downloads) |
Book excerpt: This paper sets out a framework for analyzing optimal interventions by a tax administration, one that parallels and can be closely integrated with established frameworks for thinking about optimal tax policy. Its key contribution is the development of a summary measure of the impact of administrative interventions—the “enforcement elasticity of tax revenue”—that is a sufficient statistic for the behavioral response to such interventions, much as the elasticity of taxable income serves as a sufficient statistic for the response to tax rates. Amongst the applications are characterizations of the optimal balance between policy and administrative measures, and of the optimal compliance gap.