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MORIMOTO KEIICHI
Department Undergraduate School , School of Political Science and Economics Position Associate Professor |
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| Language | English |
| Publication Date | 2023/04 |
| Type | Academic Journal |
| Peer Review | Peer reviewed |
| Title | Tax evasion and optimal corporate income tax rates in a growing economy |
| Contribution Type | Co-authored (other than first author) |
| Journal | Macroeconomic Dynamics |
| Journal Type | Another Country |
| Publisher | Cambridge University Press |
| Volume, Issue, Page | 27(3),pp.743-769 |
| Authorship | Corresponding author |
| Author and coauthor | Takeo Hori, Noritaka Maebayashi, Keiichi Morimoto |
| Details | We explore how tax evasion by firms affects the growth- and welfare-maximizing rates of corporate income tax (CIT) in an endogenous growth model with productive public service. We show that the negative effect of CIT on growth is mitigated in the presence of tax evasion. This increases the benefit of raising the CIT rate for public service provision. Thus, in contrast to Barro (1990), the optimal tax rate is higher than the output elasticity of public service. Through numerical exercises, we demonstrate that the role of tax evasion by firms is quantitatively significant. |
| DOI | 10.1017/S1365100521000638 |