Arbeitspapier
Optimal taxation of risky entrepreneurial capital
We study optimal taxation in a model with endogenous financial frictions, risky investment and occupational choice, where the distribution of wealth across entrepreneurs affects how efficiently capital is used. The planner chooses linear taxes on wealth, capital and labor income to maximize the steady state utility of a newborn agent. Most agents in the model are poor, leading to a redistributive motive for taxation. Optimal tax rates can be written as a closed-form function of the size of the tax bases and their elasticities with respect to tax rates. We find that it is optimal to tax capital income because financial frictions reduce the elasticity of capital income with respect to taxes and because capital income taxes prevent excessive entry into entrepreneurship. Optimal wealth taxes are positive but close to zero, since they strongly discourage capital accumulation.
- Sprache
-
Englisch
- Erschienen in
-
Series: ECONtribute Discussion Paper ; No. 166
- Klassifikation
-
Wirtschaft
- Thema
-
entrepreneurship
financial frictions
taxation
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Boar, Corina
Knowles, Matthew T.
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI)
- (wo)
-
Bonn and Cologne
- (wann)
-
2022
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Boar, Corina
- Knowles, Matthew T.
- University of Bonn and University of Cologne, Reinhard Selten Institute (RSI)
Entstanden
- 2022
Ähnliche Objekte (12)
Optimal Taxation of Risky Human Capital
Optimal taxation of risky human capital
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Risky earnings, taxation and entrepreneurial choice: a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice: A Microeconometric Model for Germany
Risky earnings, taxation and entrepreneurial choice : a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice : A Microeconometric Model for Germany
Optimal Taxation of Normal and Excess Returns to Risky Assets
Optimal taxation with human capital
Optimal taxation of human capital
Optimal income taxation with a risky asset: the triple income tax
Optimal Income Taxation with a Risky Asset: The Triple Income Tax
Optimal Taxation of Risky Human Capital
Optimal taxation of risky human capital
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Risky earnings, taxation and entrepreneurial choice: a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice: A Microeconometric Model for Germany
Risky earnings, taxation and entrepreneurial choice : a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice : A Microeconometric Model for Germany
Optimal Taxation of Normal and Excess Returns to Risky Assets
Optimal taxation with human capital
Optimal taxation of human capital
Optimal income taxation with a risky asset: the triple income tax
Optimal Income Taxation with a Risky Asset: The Triple Income Tax
Optimal Taxation of Risky Human Capital
Optimal taxation of risky human capital
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Risky earnings, taxation and entrepreneurial choice: a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice: A Microeconometric Model for Germany
Risky earnings, taxation and entrepreneurial choice : a microeconometric model for Germany
Risky Earnings, Taxation and Entrepreneurial Choice : A Microeconometric Model for Germany
Optimal Taxation of Normal and Excess Returns to Risky Assets
Optimal taxation with human capital
Optimal taxation of human capital
Optimal income taxation with a risky asset: the triple income tax