Optimal income tax enforcement under prospect theory
Prospect Theory (PT) has become the most accepted alternative to Expected Utility Theory (EUT) as a theory of decision under uncertainty. This paper extends the existing literature on efficient tax and audit schemes, by answering the question as to just how progressive an efficient tax system can be...
| Authors: | ; |
|---|---|
| Format: | Article |
| Status: | Accepted version |
| Publication date: | 2016 |
| Country: | España |
| Institution: | Universidad de Barcelona |
| Repository: | Dipòsit Digital de la UB |
| OAI Identifier: | oai:diposit.ub.edu:2445/108982 |
| Online Access: | https://hdl.handle.net/2445/108982 |
| Access Level: | Open access |
| Keyword: | Frau fiscal Frau de llei Impostos sobre la renda Perspectiva Control de gestió Tax evasion Evasion of the law Income tax Perspective Management audit |
| _version_ | 1878729404930064384 |
|---|---|
| author | Piolatto, Amedeo |
| author2 | Trotin, Gwenola |
| author2_role | author |
| author_browse | Piolatto, Amedeo Trotin, Gwenola |
| author_facet | Piolatto, Amedeo Trotin, Gwenola |
| author_role | author |
| collection | Dipòsit Digital de la UB |
| description | Prospect Theory (PT) has become the most accepted alternative to Expected Utility Theory (EUT) as a theory of decision under uncertainty. This paper extends the existing literature on efficient tax and audit schemes, by answering the question as to just how progressive an efficient tax system can be when assuming that taxpayers behave in line with the tenets of PT. Under reasonable assumptions regarding the reference income and the value function of taxpayers, we show that the efficient tax schedule is regressive while audit probabilities are non-increasing in the declared income. These results are consistent with the previous literature on EUT |
| eu_rights_str_mv | openAccess |
| format | article |
| id | ES_0741eccb9c6733dfc9db9b69f4e8d8f4 |
| institution | Universidad de Barcelona |
| instname_str | Universidad de Barcelona |
| network_acronym_str | ES |
| network_name_str | España |
| oai_identifier_str | oai:diposit.ub.edu:2445/108982 |
| publishDate | 2016 |
| publishDateSort | 2016 |
| publisher | Wiley |
| publisherStr | Wiley |
| reponame_str | Dipòsit Digital de la UB |
| spelling | Optimal income tax enforcement under prospect theory Piolatto, Amedeo Trotin, Gwenola Frau fiscal Frau de llei Impostos sobre la renda Perspectiva Control de gestió Tax evasion Evasion of the law Income tax Perspective Management audit Prospect Theory (PT) has become the most accepted alternative to Expected Utility Theory (EUT) as a theory of decision under uncertainty. This paper extends the existing literature on efficient tax and audit schemes, by answering the question as to just how progressive an efficient tax system can be when assuming that taxpayers behave in line with the tenets of PT. Under reasonable assumptions regarding the reference income and the value function of taxpayers, we show that the efficient tax schedule is regressive while audit probabilities are non-increasing in the declared income. These results are consistent with the previous literature on EUT Wiley https://hdl.handle.net/2445/108982 |
| spellingShingle | Optimal income tax enforcement under prospect theory Piolatto, Amedeo Frau fiscal Frau de llei Impostos sobre la renda Perspectiva Control de gestió Tax evasion Evasion of the law Income tax Perspective Management audit |
| status_str | acceptedVersion |
| title | Optimal income tax enforcement under prospect theory |
| title_full | Optimal income tax enforcement under prospect theory |
| title_fullStr | Optimal income tax enforcement under prospect theory |
| title_full_unstemmed | Optimal income tax enforcement under prospect theory |
| title_short | Optimal income tax enforcement under prospect theory |
| title_sort | Optimal income tax enforcement under prospect theory |
| topic | Frau fiscal Frau de llei Impostos sobre la renda Perspectiva Control de gestió Tax evasion Evasion of the law Income tax Perspective Management audit |
| topic_facet | Frau fiscal Frau de llei Impostos sobre la renda Perspectiva Control de gestió Tax evasion Evasion of the law Income tax Perspective Management audit |
| url | https://hdl.handle.net/2445/108982 |