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Optimal Indirect and Capital Taxation

Author

Listed:
  • Mikhail Golosov
  • Narayana Kocherlakota
  • Aleh Tsyvinski

Abstract

In this paper, we consider an environment in which agents? productivities are private information, potentially multi-dimensional, and follow arbitrary stochastic processes. We allow for arbitrary incentive-compatible and physically feasible tax schemes. We prove that it is typically Pareto optimal to have positive capital taxes. As well, we prove that in any given period, it is Pareto optimal to tax consumption goods at a uniform rate.
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Suggested Citation

  • Mikhail Golosov & Narayana Kocherlakota & Aleh Tsyvinski, 2002. "Optimal Indirect and Capital Taxation," Levine's Working Paper Archive 391749000000000449, David K. Levine.
    • Handle: RePEc:cla:levarc:391749000000000449
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    References listed on IDEAS

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