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Taxing the Rich

Author

Listed:
  • Augustin Landier

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

  • Guillaume Plantin

    (UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse, Tepper School of Business - CMU - Carnegie Mellon University [Pittsburgh])

Abstract

Affluent households can respond to taxation with means that are not economically viable for the rest of the population, such as sophisticated tax plans and international tax arbitrage. This paper studies an economy in which an inequality-averse social planner faces agents who have access to a tax-avoidance technology with increasing returns to scale, and who can shape the risk profile of their income as they see fit. Scale economies in avoidance imply that optimal taxation is regressive at the top. This in turn may trigger excessive risk taking.

Suggested Citation

  • Augustin Landier & Guillaume Plantin, 2013. "Taxing the Rich," Working Papers hal-03470576, HAL.
    • Handle: RePEc:hal:wpaper:hal-03470576
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-03470576
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    References listed on IDEAS

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    Cited by:

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    2. Georges Casamatta, 2021. "Optimal income taxation with tax avoidance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 534-550, June.
    3. repec:hal:wpspec:info:hdl:2441/7dgqij8a2d89s9v4v2v5qhs9vs is not listed on IDEAS
    4. Viral Acharya & Guillaume Plantin, 2018. "Monetary Easing, Investment and Financial Instability," Sciences Po publications DP 13072, Sciences Po.
    5. Alstadsæter, Annette & Johannesen, Niels & Le Guern Herry, Ségal & Zucman, Gabriel, 2022. "Tax evasion and tax avoidance," Journal of Public Economics, Elsevier, vol. 206(C).
    6. repec:hal:spmain:info:hdl:2441/2oaa6391f290lqkugdaeab6cq4 is not listed on IDEAS
    7. Bag, Parimal K. & Wang, Peng, 2021. "Income tax evasion and audits under common and idiosyncratic shocks," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 99-116.
    8. Georges Casamatta, 2023. "Optimal income taxation with tax avoidance and endogenous labor supply," Post-Print hal-04015963, HAL.
    9. repec:hal:spmain:info:hdl:2441/7dgqij8a2d89s9v4v2v5qhs9vs is not listed on IDEAS

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    More about this item

    Keywords

    Taxation; Theoretical framework; Tax-avoidance;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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