Age-Dependent Taxation and the Optimal Retirement Benefit Formula
AbstractThis paper presents a comprehensive view of lifetime taxation including both explicit taxation through the general tax system and implicit taxation via the retirement benefit formula. Differences in productivity between individuals are unobservable, which provides a rationale for the use of distortionary taxes. It is shown that the optimal structure of age-dependent taxation can be characterized by a generalized Ramsey formula. Furthermore, the paper derives the optimal retirement benefit formula in the presence of the general tax system and examines the compatibility with the financial stability of the pension system. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2008.
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Bibliographic InfoArticle provided by Verein für Socialpolitik in its journal German Economic Review.
Volume (Year): 9 (2008)
Issue (Month): (02)
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Other versions of this item:
- Mathias Kifmann, 2004. "Age-dependent taxation and the optimal retirement benefit formula," Working Papers of the Research Group Heterogenous Labor 04-20, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
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