Taxing Risky Capital Income - A Commodity Taxation Approach
AbstractIn a two-period world with endogenous savings and two assets, the optimal tax structure and optimal diversification of aggregate (capital) risk between private and public consumption are analyzed. We show that there is no trade-off between efficiency in intertemporal consumption and allocation of risk; both goals are reached as long as labor supply is exogenous. This requires, however, taxing the excess return at a special tax rate. Optimally extending the dual income tax for risky capital income, accordingly, leads to a tax system with three tax bases: the triple income tax.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Mohr Siebeck, Tübingen in its journal FinanzArchiv.
Volume (Year): 64 (2008)
Issue (Month): 3 (September)
Contact details of provider:
Web page: http://www.mohr.de/fa
Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Syed Ahsan & Peter Tsigaris, 1998.
"The design of a consumption tax under capital risk,"
Journal of Economics,
Springer, vol. 68(1), pages 53-78, February.
- Syed M. Ahsan & Peter Tsigaris, . "The Design of a Consumption Tax under Capital Risk," EPRU Working Paper Series 97-11, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Sinn, Hans-Werner, 1996.
"Social Insurance, Incentives and Risk Taking,"
Munich Reprints in Economics
19834, University of Munich, Department of Economics.
- Ahsan, Syed M., 1989. "Choice of tax base under uncertainty : Consumption or income?," Journal of Public Economics, Elsevier, vol. 40(1), pages 99-134, October.
- Kaplow, Louis, 1994. "Taxation and Risk Taking: A General Equilibrium Perspective," National Tax Journal, National Tax Association, vol. 47(4), pages 789-98, December.
- Syed M. Ahsan, 1990. "Risk-Taking, Savings, and Taxation: A Re-examination of Theory and Policy," Canadian Journal of Economics, Canadian Economics Association, vol. 23(2), pages 408-33, May.
- Paolo M. Panteghini, 2009.
"On the Equivalence between Labor and Consumption Taxation,"
0904, University of Brescia, Department of Economics.
- Paolo M. Panteghini, 2009. "On the equivalence between labor and consumption taxation," Economics Bulletin, AccessEcon, vol. 29(2), pages 622-629.
- Paolo Panteghini, 2009. "On the Equivalence between Labor and Consumption Taxation," CESifo Working Paper Series 2593, CESifo Group Munich.
- Schindler, Dirk, 2008. "Human Capital, Multiple Income Risk and Social Insurance," Discussion Papers 2008/18, Department of Business and Management Science, Norwegian School of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Wolpert).
If references are entirely missing, you can add them using this form.