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This authoritative two-volume set brings together the most important classic and contemporary papers on taxation and tax policy, written by the world's leading scholars and practitioners of taxation. Volume I reviews the effects of taxation, optimal taxation and tax reform. Volume II presents the latest theoretical and empirical work on how taxes affect individual decisions across a range of areas, concluding with studies of the effects of taxes on firm investment and financial structure decisions. The volumes will interest those teaching upper-level and graduate level courses in taxation and tax policy, and individuals who want to be informed on the latest research in taxation

There are competing "views" on the economic effects of debt finance. One view argues that tax and debt finance have identical effects on various economic measures, a view sometimes termed "Ricardian Equivalence". However, this "Ricardian view" remains controversial, with other views (the "Keynesian view" and the "Neoclassical view") concluding that debt finance is likely to have significant impacts on consumption, interest rates, and the current account. Empirical tests of these competing views, conducted mainly for developed countries, have failed to generate much consensus, and there are few studies for developing countries, especially a developing country that is heavily dependent on natural resources (e.g., oil). This paper provides a battery of empirical tests on the effects of government debt finance in one developing country, Indonesia. We focus on three empirical tests: effects on consumption, on interest rates, and on the current account balance. We find, across virtually all of our time series tests, that Ricardian Equivalence does not hold; that is, the predictions of the Ricardian paradigm are consistently and strongly rejected by most of our estimation results. The only results that tend to give some support to Ricardian Equivalence are those that recognize the importance of oil in the Indonesian economy. Even so, our results generally indicate that debt finance will increase the interest rate, will increase current consumption at the expense of future consumption, and will retard exports and stimulate imports through currency appreciation.

For decades, policy makers and politicians have railed against the "tax gap," or the difference between what taxpayers are legally obligated to pay in taxes and what they actually pay in taxes. To close the gap, Congress has instituted numerous reforms with varying degrees of success. Notwithstanding these efforts, the tax gap has largely remained intact, and, if anything, it has gradually grown over the last several decades. However, the tax gap may well begin to diminish in size (or "wither" away), if not immediately then over time. Three developments will help narrow the tax gap's size. First, the ubiquity of credit cards, debit cards, and smartphone payment apps has purged cash—the erstwhile driving engine of the tax gap—from its use in many economic transactions. Second, the availability of third-party sources of information, combined with the universal use of computerization to store, access, and analyze information, has significantly curtailed a taxpayer's ability to hide income here in the United States or overseas. Third, broad economic trends such as concentration and globalization have generated a workforce dynamic in which taxpayers generally are employed by large business enterprises (where individual tax compliance is fairly high) rather than in traditional mom-and-pop businesses (where individual tax compliance is typically low). The implications associated with a lower tax gap are vast. Even beyond the usual considerations associated with greater tax compliance (e.g., increased revenues, reduced noncompliance-induced inefficiencies, and improved horizontal and vertical equity of tax burdens), taxpayers would experience a shift in the labor market and an adjustment in the prices paid for consumer goods and services. Also, rather than conducting audits and deterring noncompliance, the Internal Revenue Service (IRS) would be able to dedicate a greater share of its limited resources to other pressing agenda items, such as assisting taxpayers in their compliance endeavors. There are, of course, other ...

An enduring problem in the analysis of tax evasion is the difficulty of its measurement. An especially troublesome component of tax evasion arises from informal suppliers, such as self‐employed domestic workers, street‐side vendors, and moonlighting tradesmen. We develop in this paper a new approach for estimating self‐employment earnings of informal suppliers. Our methodology involves using national survey results on self‐employment earnings within a carefully selected set of industry categories where informal activities are concentrated. Then, by comparing these national survey results on self‐employment earnings to Internal Revenue Service statistics on the amounts actually reported for tax purposes, it is possible to estimate the extent of noncompliance within the selected industry categories. Our methodology relies on survey respondents being reasonably forthcoming about their earnings, which we are able to confirm through some validation exercises.

There are competing 'views' on the economic effects of debt finance. One view argues that tax and debt finance have identical effects on various economic measures, a view sometimes termed 'Ricardian Equivalence'. However, this 'Ricardian view' remains controversial, with other views (the 'Keynesian view' and the 'Neoclassical view') concluding that debt finance is likely to have significant impacts on consumption, interest rates, and the current account. Empirical tests of these competing views, conducted mainly for developed countries, have failed to generate much consensus, and there are few studies for developing countries, especially a developing country that is heavily dependent on natural resources (e.g., oil). This paper provides a battery of empirical tests on the effects of government debt finance in one developing country, Indonesia. We focus on three empirical tests: effects on consumption, on interest rates, and on the current account balance. We find, across virtually all of our time series tests, that Ricardian Equivalence does not hold; that is, the predictions of the Ricardian paradigm are consistently and strongly rejected by most of our estimation results. The only results that tend to give some support to Ricardian Equivalence are those that recognize the importance of oil in the Indonesian economy. Even so, our results generally indicate that debt finance will increase the interest rate, will increase current consumption at the expense of future consumption, and will retard exports and stimulate imports through currency appreciation.