Environmental Taxation and Redistribution Concerns

Environmental Taxation and Redistribution Concerns

Taxation and Redistribution: Some Clarifications

This essay revisits certain basic features of tax systems as they relate to redistribution. It focuses on how the actual differences between proportional and graduated taxes with regard to redistribution diverge in important ways from what many believe or implicitly assume. The analysis seeks to clarify tax policy debates, including those surrounding classic treatments of progressivity and cont...

Optimal capital income taxation and redistribution

This paper studies the e ects of agent heterogeneity on optimal capital income tax rates. In a two period model with arbitrarily many heterogeneous agents, we explicitly derive the welfare e ects of taxation depending on the distribution of the agents' characteristics. In particular, we show that the sign of the optimal capital income tax rate depends not on the extent of inequality in goods en...

Taxation and Redistribution of Residual Income Inequality

[ Journa © 2013 market. We study this problem in the context of a directed search model of the labor market populated by homogeneous workers and heterogeneous firms. The optimal redistribution can be attained using a positive unemployment benefit and an increasing and regressive labor income tax. The positive unemployment benefit serves the purpose of lowering the search risk faced by workers. ...

Taxation, redistribution, and debt with aggregate shocks

We study optimal income taxes and transfers in an economy with heterogeneous agents and aggregate shocks. An optimal equilibrium determines agents’ net asset positions, but not their absolute levels. The distribution of debt holdings across agents influences optimal allocations and taxes, but the level of government debt does not. Higher correlations of debt holdings and labor incomes imply mor...