Arbeitspapier
The Optimal Taxation of Risky Capital Income: The Rate of Return Allowance
We study the optimality of taxing capital income according to a Rate-of-Return Allowance proposed by the Mirrlees Review. In a mean-variance framework the optimal tax on risk-free returns is zero with constant returns to scale in private investment, but positive with decreasing returns to scale, and vice versa. The optimal tax rate on excess returns to risky assets is positive if the stochastic tax revenue is returned to the household by variable public good provision. If it is returned as a stochastic lump sum, the optimal tax on excess returns is irrelevant with only aggregate risk, and approaches 100 % if there is also idiosyncratic risk.
- Sprache
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Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 6297
- Klassifikation
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Wirtschaft
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- Thema
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optimal capital taxation
rate of return allowance
- Ereignis
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Geistige Schöpfung
- (wer)
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Spiritus, Kevin
Boadway, Robin
- Ereignis
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Veröffentlichung
- (wer)
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Center for Economic Studies and ifo Institute (CESifo)
- (wo)
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Munich
- (wann)
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2017
- Handle
- Letzte Aktualisierung
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20.09.2024, 08:26 MESZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Spiritus, Kevin
- Boadway, Robin
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2017