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Optimal Income Taxation with Asset Accumulation

Author Info

Listed author(s):
  • Sebastian Koehne

    (IIES, Stockholm University)

  • Nicola Pavoni

    (Bocconi University)

  • Arpad Abraham

    (European University Institute)

Abstract

Several frictions might prevent (or make undesirable) the full taxation of savings. Due to international capital mobility, for instance, the government may not have perfect control over agent's saving and consumption decisions. We show in this paper that a restricted ability to tax savings has important implications for the taxation of labor income. Specifically, when agents have preferences with convex absolute risk-aversion, we find that optimal marginal tax rates on labor income become more regressive when savings cannot be fully taxed.

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File URL: https://economicdynamics.org/meetpapers/2011/paper_1161.pdf
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Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 1161.

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Date of creation: 2011
Handle: RePEc:red:sed011:1161
Contact details of provider: Postal:
Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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Find related papers by JEL classification:
  • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
  • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
  • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
  • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

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  1. Philippe Chone & Guy Laroque, 2010. "Negative Marginal Tax Rates and Heterogeneity," American Economic Review, American Economic Association, vol. 100(5), pages 2532-2547, December.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Optimal Income Taxation with Asset Accumulation
    by Christian Zimmermann in NEP-DGE blog on 2015-03-05 05:42:45
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:

  1. Marek Kapicka & Julian Neira, 2015. "Optimal Taxation with Risky Human Capital," Discussion Papers 1504, Exeter University, Department of Economics.
  2. Christine Ho & Nicola Pavoni, 2016. "Efficient Child Care Subsidies," Working Papers 572, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  3. Koehne, Sebastian & Kuhn, Moritz, 2015. "Optimal taxation in a habit formation economy," Journal of Public Economics, Elsevier, vol. 122(C), pages 31-39.
  4. Koehne, Sebastian & Kuhn, Moritz, 2013. "Optimal capital taxation for time-nonseparable preferences," MPRA Paper 45203, University Library of Munich, Germany.
  5. Spencer Bastani & Sören Blomquist & Luca Micheletto, 2013. "The Welfare Gains Of Age‐Related Optimal Income Taxation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54, pages 1219-1249, November.
  6. Campos, Rodolfo G. & Reggio, Iliana, 2014. "Measurement error in imputation procedures," Economics Letters, Elsevier, vol. 122(2), pages 197-202.

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