Our paper sets out a simple model providing a micro-foundation for the success of third party reporting. In this model, the government is trying to extract tax revenue from individual income earners, who are employed and paid by firms.
Kleven, H.; Kreiner, C.; Saez, E. Why Can Modern Governments Tax So Much? An Agency Model of Firmsas Fiscal Intermediaries (Policy Brief). International Growth Centre (IGC), London, UK (2012) 2 pp.