Optimal Capital Taxation and Precautionary Savings
نویسندگان
چکیده
There are multiple reasons to motivate the role of capital taxation in heterogenous-agent incomplete-markets (HAIM) model. One is production inefficiency caused by precautionary savings. The other wealth redistribution played taxation.
منابع مشابه
Optimal Capital Income Taxation∗
In an economy with identical infinitely-lived households that obtain utility from leisure as well as consumption, Chamley (1986) and Judd (1985) have shown that the optimal tax system to pay for an exogenous stream of government purchases involves a zero tax rate on capital in the long run, with tax revenue collected by a distortionary tax on labor income. Extending the results of Hall and Jorg...
متن کاملOptimal Indirect and Capital Taxation
We consider an environment in which agents’ skills are private information and follow arbitrary stochastic processes. We prove that it is typically Pareto optimal for an individual’s marginal benefit of investing in capital to exceed his marginal cost of doing so. This wedge is consistent with a positive tax on capital income. We also prove that it is Pareto optimal for the marginal rate of sub...
متن کاملOptimal 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...
متن کاملPreference heterogeneity and optimal capital income taxation
We analytically and quantitatively examine a prominent justi cation for capital income taxation: goods preferred by those with high ability ought to be taxed. We study an environment where commodity taxes are allowed to be nonlinear functions of income and consumption and nd that, when ability is positively related to a preference for a good, optimal marginal commodity taxes on this good may b...
متن کاملTaxation, Insurance, and Precautionary Labor
We examine optimal taxation and social insurance with adverse selection in competitive insurance markets. In the previous literature, it has been shown that, with perfect insurance markets, social insurance improves welfare since it is able to redistribute without creating distortions. This result has been taken as robust to the introduction of adverse selection as this would only provide addit...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Review
سال: 2021
ISSN: ['0314-7533']
DOI: https://doi.org/10.20955/r.103.333-49