The article looks at how tax evasion affects public spending on tax collection services. By using a model that considers tax rates and monitoring expenses, the researchers found that the optimal tax rate is linked to private capital elasticity. However, when tax evasion impacts social welfare, the effective tax rate is lower than the output elasticity. Their analysis of data from 145 countries in 2011 shows that both tax evasion and economic growth decrease when more money is spent on monitoring expenses. The best policies for welfare involve setting a lower tax rate than the public capital elasticity and allocating around 6.0% of tax revenues to monitoring expenses.