Tax Optimizing Under Tax Evasion

Tax evasion is a common behavior of human all round the world. The illegal action brings new unfair to us by enhancing the difference of incoming between people and exists universally. And the game actions of taxpayers make some taxation policy inability. This paper concerns most factors of tax evasion. In a classical model of tax evasion it is needed to control tax evasion that the product of the penalty and the audit probability is no less some constant. A sample game model has the same conclusion. Thereby, it theoretically deduces that the tax evasion should be caught by a zero probability and the severest penalty. But this way is not feasible at all. What's more, we find that severe penalty will bring more corruption when tax corruption is concerned. In order to resolve the legislative problem, this paper introduces black list dynamic audit, transferring the penalty to the recidivists. This paper also has a discussion in detail and concision on the penalty of tax evasion. The model constricted in two years span indicates that the way depending on penalty is limited in function. A model of social mentality and tax evasion is also concerned to explain the puzzle of tax compliance. This paper ends with a model of taxpayers with private information. The taxpayers described by different consumption types will try to misreport his information to evasion.This article concerns many factors of tax evasion and discuss them in different models. It also give some policy advises, especially on the legislative of penalty.