{
  "title": "Optimal Tax Administration",
  "publication": "IMF Working Papers, January 20, 2017",
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  "summary": "This paper sets out a framework for analyzing optimal interventions by a tax administration, one that parallels and can be closely integrated with established frameworks for thinking about optimal tax policy.",
  "sections": [
    {
      "heading": "Summary and key contribution",
      "content": "- Sets out a framework for analyzing optimal interventions by a tax administration, parallel to and integrable with established frameworks for optimal tax policy.\n- Develops a summary measure of the impact of administrative interventions — the “enforcement elasticity of tax revenue” — which is a sufficient statistic for the behavioral response to such interventions, analogous to the elasticity of taxable income as a sufficient statistic for the response to tax rates.\n- Applications include characterizations of:\n  - the optimal balance between policy and administrative measures, and\n  - the optimal compliance gap."
    },
    {
      "heading": "Findings and analytical constructs",
      "content": "- Enforcement elasticity of tax revenue introduced as a unifying sufficient statistic for administrative intervention effects.\n- Framework links administrative action and standard optimal tax theory via sufficient-statistic approach.\n- Behavioral responses to administrative interventions can be summarized by a single elasticity measure, facilitating comparative statics and policy design."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Use the enforcement elasticity of tax revenue to guide resource allocation between:\n  - changes in tax policy (rates, bases), and\n  - administrative measures (enforcement, compliance efforts).\n- Characterize and target the optimal compliance gap using the framework’s sufficient-statistic summaries.\n- Evaluate marginal revenue-cost ratios of administrative interventions using the enforcement elasticity as the key parameter."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Compliance costs, National accounts, Personal income, Revenue administration, Revenue performance assessment, Tax administration core functions, Tax gap\n- Keywords: administration cost, Compliance costs, cost-revenue ratio, elasticity rule, enforcement elasticity, implementation cost, IRS initiative, marginal revenue-cost ratio, optimal taxation, Personal income, Tax administration, Tax administration core functions, tax compliance, Tax gap, tax rate, taxable income, WP\n\n---\n\n Content in this bundle\n\n- wp1708\n  - wp1708 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1708 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/01/20/optimal-tax-administration-44555"
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    "Authors: Michael Keen, Joel Slemrod",
    "Published: January 20, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475570267.001",
    "Sets out a framework for analyzing optimal interventions by a tax administration, parallel to and integrable with established frameworks for optimal tax policy.",
    "Develops a summary measure of the impact of administrative interventions — the “enforcement elasticity of tax revenue” — which is a sufficient statistic for the behavioral response to such interventions, analogous to the elasticity of taxable income as a sufficient statistic for the response to tax rates.",
    "Applications include characterizations of:",
    "Enforcement elasticity of tax revenue introduced as a unifying sufficient statistic for administrative intervention effects.",
    "Framework links administrative action and standard optimal tax theory via sufficient-statistic approach.",
    "Behavioral responses to administrative interventions can be summarized by a single elasticity measure, facilitating comparative statics and policy design.",
    "Use the enforcement elasticity of tax revenue to guide resource allocation between:",
    "Characterize and target the optimal compliance gap using the framework’s sufficient-statistic summaries.",
    "Evaluate marginal revenue-cost ratios of administrative interventions using the enforcement elasticity as the key parameter.",
    "Subject: Compliance costs, National accounts, Personal income, Revenue administration, Revenue performance assessment, Tax administration core functions, Tax gap",
    "Keywords: administration cost, Compliance costs, cost-revenue ratio, elasticity rule, enforcement elasticity, implementation cost, IRS initiative, marginal revenue-cost ratio, optimal taxation, Personal income, Tax administration, Tax administration core functions, tax compliance, Tax gap, tax rate, taxable income, WP",
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