Corruption, Tax Evasion and the Laffer Curve

We introduce bureaucratic corruption in a simple way and examine its effect on government revenue when policies change. We show that a rise in the tax rate can lead to a fall in net revenue--a Laffer curve result due to the proportion of auditors that are corrupt and enforcement costs. It may pay for the government to lower audit probabilities and induce cheating. If corruption is low enough, revenues garnered from capturing people cheating may exceed those from choosing an audit structure in which everyone declares their true income. We also examine a case in which corruption is endogenous

Corruption, Tax Evasion and the Laffer Curve

We introduce bureaucratic corruption in a simple way and examine its effect on government revenue when policies change. We show that a rise in the tax rate can lead to a fall in net revenue--a Laffer curve result due to the proportion of auditors that are corrupt and enforcement costs. It may pay for the government to lower audit probabilities and induce cheating. If corruption is low enough, revenues garnered from capturing people cheating may exceed those from choosing an audit structure in which everyone declares their true income. We also examine a case in which corruption is endogenous.auditing; bureaucracy; corruption; laffer curve; tax evasion;

First mammal evidence from the Late Cretaceous of India for biotic dispersal between India and Africa at the KT transition

The Late Cretaceous record of mammals from India assumes great significance in view of the fact that it is the only Gondwanan landmass that has yielded definitive eutherian mammals. These mammals have variously been assigned to palaeoryctids, archontans or Eutheria incertae sedis. Well preserved lower molars recovered from a new mammal-yielding Deccan intertrappean site near Kisalpuri village, Dindori District, Madhya Pradesh (state), India, are described here under a new species Deccanolestes narmadensis sp. nov. The new fossil material indicates close phylogenetic relationship between Deccanolestes from India and Afrodon (Adapisoriculidae) from the Late Palaeocene of Africa and Europe. In view of older age and more primitive state of Deccanolestes teeth, it is inferred that Deccanolestes represents an ancestral morphotype from which the African/European adapisoriculid Afrodon may have been derived. This is the first compelling terrestrial fossil evidence for an early dispersal between India and Africa. Such a dispersal possibly involved an East African contact with India at the KT transition