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Optimal Tax Administration
Author:
Mr. Michael Keen
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Mr. Joel Slemrod null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2017: Issue 008
Language:
English
Publication Date:
20 Jan 2017
DOI:
https://doi.org/10.5089/9781475570267.001
ISBN:
9781475570267
ISSN:
1018-5941
Pages:
27
Keywords:
WP; tax rate; taxable income; Tax administration; tax compliance; optimal taxation; enforcement elasticity; administration cost; cost-revenue ratio; marginal revenue-cost ratio; elasticity rule; implementation cost; IRS initiative; Personal income; Tax administration core functions; Tax gap; Compliance costs
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund