Tag Archives: optimal taxation

Optimal Tax Progressivity: An Analytical Framework

From Jonathan Heathcote, Kjetil Storesletten, Giovanni Violante: What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance … Continue reading

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Capital Requirements, Risk Choice, and Liquidity Provision in a Business Cycle Model

From Juliane Begenau: This paper presents a quantitative dynamic general equilibrium model for the purpose of determining the optimal capital requirement for banks. Banks play two roles in this model: They contribute to the production of a final good and … Continue reading

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Rethinking capital and wealth taxation

From Thomas Piketty and Emmanuel Saez: This paper reviews recent developments in the theory of optimal capital taxation. We emphasize three main rationales for capital taxation. First, the frontier between capital and labor income flows is often fuzzy, thereby lending … Continue reading

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Equalizing Outcomes and Equalizing Opportunities: Optimal Taxation when Children’s Abilities Depend on Parents’ Resources

From Alex Gelber and Matthew Weinzierl: Empirical research suggests that parents’ economic resources affect their children’s future earnings abilities. Optimal tax policy therefore treats future ability distributions as endogenous to current taxes. We model this endogeneity, calibrate the model to match … Continue reading

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