* Mr. Mansfield, Senior Economist in the Fiscal Affairs Department, holds degrees from Oberlin College and Princeton University.
Economists have, however, incorporated tax-administrative constraints in the context of advice on practical situations; see, for example, Musgrave and Gillis (1971). A recent treatment of administrative problems is contained in Bird (1983).
Note, in what follows, that after 1986 the civil fraud penalty was raised from 50 percent to 75 percent of taxes owed and modified. The change does not affect the substance of the argument.
An additional assumption is that the elasticities of the supply of labor are such that the actions of higher-income taxpayers who will gain from the change more than offset those of lower-income taxpayers who will lose from the change
See Richupan (1987). For a full exposition of the application of supply-side taxation ideas to developing countries, see Gandhi (1987).
A complete explanation of differences in effective tax structures would certainly acknowledge that differences in the structure of production and income distribution play a role in determining tax structure. For example, that large numbers of the population in many developing countries live in poverty explains why a mass income tax would not be feasible.
The tax handle theory has also been used to explain different tax levels as well as tax structures among different countries (see the references cited in footnote 8).