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Optimal income taxation and migration

Author

Listed:
  • Valeria Bonis

    (Università di Roma “La Sapienza”)

  • Luca Spataro

    (Università di Pisa)

Abstract

We tackle the issue of optimal dynamic taxation of capital income in an economy with disconnection as in Weil (J Public Econ 38:183–198, 1989), generated by migration and intra-family altruism. We show that, when the government aims at correcting such a disconnection using time-varying weights in the social welfare function, then there is room for nonzero capital income taxation, both in the short and in the long run.

Suggested Citation

  • Valeria Bonis & Luca Spataro, 2018. "Optimal income taxation and migration," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(4), pages 867-882, August.
    • Handle: RePEc:kap:itaxpf:v:25:y:2018:i:4:d:10.1007_s10797-018-9483-6
    DOI: 10.1007/s10797-018-9483-6
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    More about this item

    Keywords

    Optimal dynamic taxation; Migration; Social discounting;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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