Arbeitspapier
Optimal Taxation of Capital Income with Heterogeneous Rates of Return
There is increasing empirical evidence that people systematically differ in their rates of return on capital. We derive optimal non-linear taxes on labor and capital income in the presence of such return heterogeneity. We allow for two distinct reasons why returns are heterogeneous: because individuals with higher ability obtain higher returns on their savings, and because wealthier individuals achieve higher returns due to scale effects in wealth management. In both cases, a strictly positive tax on capital income is part of a Pareto-efficient dual income tax structure. We write optimal tax rates on capital income in terms of sufficient statistics and find that they are increasing in the degree of return heterogeneity. Numerical simulations for empirically plausible return heterogeneity suggest that optimal marginal tax rates on capital income are positive, substantial, and increasing in capital income.
- Sprache
-
Englisch
- Erschienen in
-
Series: Tinbergen Institute Discussion Paper ; No. TI 2020-038/VI
- Klassifikation
-
Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- Thema
-
Optimal taxation
capital taxation
heterogeneous returns
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gerritsen, Aart
Jacobs, Bas
Rusu, Alexandra V.
Spiritus, Kevin
- Ereignis
-
Veröffentlichung
- (wer)
-
Tinbergen Institute
- (wo)
-
Amsterdam and Rotterdam
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
20.09.2024, 08:23 MESZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Gerritsen, Aart
- Jacobs, Bas
- Rusu, Alexandra V.
- Spiritus, Kevin
- Tinbergen Institute
Entstanden
- 2020
Ähnliche Objekte (12)
Optimal Taxation of Capital Income with Heterogeneous Rates of Return
Optimal Income Taxation when Skills and Behavioral Elasticities are Heterogeneous
Optimal piecewise linear income taxation
Optimal Piecewise Linear Income Taxation
Optimal piecewise linear income taxation
Age Related Optimal Income Taxation
Optimal linear commodity taxation under optimal non-linear income taxation
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Optimal Commodity Taxation Under Non-linear Income Taxation
Union strategy and optimal income taxation
Optimal Income Taxation with Composition Effects
Optimal Income Taxation with Composition Effects
Optimal Taxation of Capital Income with Heterogeneous Rates of Return
Optimal Income Taxation when Skills and Behavioral Elasticities are Heterogeneous
Optimal piecewise linear income taxation
Optimal Piecewise Linear Income Taxation
Optimal piecewise linear income taxation
Age Related Optimal Income Taxation
Optimal linear commodity taxation under optimal non-linear income taxation
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Optimal Commodity Taxation Under Non-linear Income Taxation
Union strategy and optimal income taxation
Optimal Income Taxation with Composition Effects
Optimal Income Taxation with Composition Effects
Optimal Taxation of Capital Income with Heterogeneous Rates of Return
Optimal Income Taxation when Skills and Behavioral Elasticities are Heterogeneous
Optimal piecewise linear income taxation
Optimal Piecewise Linear Income Taxation
Optimal piecewise linear income taxation
Age Related Optimal Income Taxation
Optimal linear commodity taxation under optimal non-linear income taxation
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
Optimal Commodity Taxation Under Non-linear Income Taxation
Union strategy and optimal income taxation
Optimal Income Taxation with Composition Effects