%A Georges Casamatta
%J Canadian Journal Of Economics
%T Optimal income taxation with tax avoidance and endogenous labor supply
%X I determine the optimal income tax schedule when individuals both choose endogenously their labour supply and have the possibility of avoiding paying taxes. Considering a convex concealment cost function, I propose a formula for the optimal marginal tax rate, that generalizes the formula of the standard Mirrlees model to the case of tax avoidance. I also show that the results obtained by Casamatta (2021) in the fixed income case hold true when labour supply is endogenous: with a low enough marginal cost of avoidance, it is optimal to let some taxpayers, located in the interior of the skill distribution, avoid taxes.
%N n° 3
%P 919-939
%V vol. 56
%D 2023
%I Blackwell Publishing
%R 10.1111/caje.12675
%L publications48228