Excise tax evasion, tax revenue, and welfare

This article investigates how tar evasion changes the relationship between tax rate, tax revenue, and welfare at the margin. It gives expressions for the marginal tar revenue, the marginal welfare loss, and the marginal cost of public funds and shows that tar evasion may reduce as well as increase the magnitudes of these measures. However; when the tared goad is perfectly inelastic in demand tar evasion causes marginal cost of public funds to increase and exceed one (its value in the absence of evasion).