Taxing Top Earners: A Human Capital Perspective
نویسندگان
چکیده
We assess the consequences of increasing the marginal tax rate on U.S. top earners using a human capital model. We find that (1) the peak of the model Laffer curve occurs at a 52 percent top tax rate, (2) there is a formula featuring three elasticities that accurately predicts the top of the model Laffer curve and (3) standard empirical methods underestimate the long-run model earnings elasticity that enters this formula.
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