Optimal nonlinear income and inheritance taxation in an infinite horizon model with quasi-linear preference

Arbeitspapier

This paper analyzes optimal nonlinear income and inheritance taxation by incorporating two types of models that were developed independently in the public finance literature: an infinite horizon representative agent model such as Judd (1995), Chamley (1986) and Lucas (1992), and asymmetric information model analyzed by Mirrlees (1971) and Stiglitz (1982). In this paper, by using an infinite horizon model with heterogenous agents and quasi-linear preference under an asymmetric information environment we characterize optimal income and inheritance taxation. This paper shows that, contrary to the general perception that inheritance taxation should be progressive to some extent, the expected tax liability of those who have a higher level of assets is lower than the expected tax liability of those who have a lower level of assets. Thus, the optimal inheritance tax is regressive.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 595

Classification and Topics

• Classification: Wirtschaft
• Subject: capital income taxation ; heterogenous agents ; redistribution ; inheritance taxation ; Optimale Besteuerung ; Einkommensteuer ; Erbschaftsteuer ; Asymmetrische Information ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Naito, Hisahiro
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/92771
• Last update: 10.03.2025, 11:43 AM CET