Journal of Tax Research

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Tax is one of the financial policy tools in regulating various economic activities to achieve economic balance and to establish social justice. Tax policies can not only help to provide financial resources for government, but also contribute to economic development and growth. Government can use appropriate tax policies and an optimized combination of direct and indirect taxes to accomplish successfully optimized resource assignment, redistribution of income and social justice. So, tax revenues affect the efficiency of financial policies implementation. One of the factors affecting government performance in receiving tax revenues is rent-seeking opportunities through which the possibility of tax payment lags may occur. This paper tries to extract the optimized tax rate in the context of rent-seeking economy in terms of a public balance system and intelligent optimization methods (Genetic algorithm). The results of optimization of described models indicated that in the context of rent-seeking in government tax revenues, tax on consumption is more than optimized level and conversely, tax on wage and payment is lower than optimized level. These findings indicate that the possibility of rent-seeking on wage tax is more than consumption tax due to implementation complexity and its reception. Meanwhile, rent-seeking in consumption tax is lower than another due to transparency and a single rate.
 

Keywords: Optimal Tax Rate, Rent -seeking, General Equilibrium, Economic shocks, Genetic Algorithm, Iran

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