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Casamatta, Georges
ORCID: https://orcid.org/0000-0001-6197-5846 and Cremer, HelmuthORCID: https://orcid.org/0000-0002-8290-5705
(2025)
Tax avoidance and commodity tax differentiation.
Economics letters, vol.257.
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Abstract
We analyze the optimal combination of direct and indirect taxes in the presence of tax avoidance. Proportional commodity taxes remain part of the optimal tax structure when avoidance is possible, even when the Atkinson–Stiglitz conditions hold. Taxing consumption, despite avoidance, enhances the screening of unobserved productivity relative to income taxation alone. Under weak separability and homothetic subutility, optimal commodity taxes are positive and uniform. With non-homothetic preferences, uniformity may not hold, and the optimal differentiation between luxuries and necessities depends on the distribution of productivity.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | December 2025 |
| Refereed: | Yes |
| Place of Publication: | Amsterdam |
| Uncontrolled Keywords: | Optimal taxation, Tax avoidance, Indirect taxation, Atkinson–Stiglitz theorem, Commodity taxation |
| JEL Classification: | H21 - Efficiency; Optimal Taxation H26 - Tax Evasion |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 18 Nov 2025 07:57 |
| Last Modified: | 20 Nov 2025 10:31 |
| OAI Identifier: | oai:tse-fr.eu:131100 |
| URI: | https://publications.ut-capitole.fr/id/eprint/51649 |
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Tax avoidance and commodity tax differentiation. (deposited 18 Apr 2025 07:07)
- Tax avoidance and commodity tax differentiation. (deposited 18 Nov 2025 07:57) [Currently Displayed]
