Check nearby libraries
Buy this book
![Loading indicator](/images/ajax-loader-bar.gif)
We examine a prominent justification for capital income taxation: goods preferred by those with high ability ought to be taxed. In an environment where commodity taxes are allowed to be nonlinear functions of income and consumption, we derive an analytical expression that reveals the forces determining optimal commodity taxation. We then calibrate the model to evidence on the relationship between skills and preferences and extensively examine the quantitative case for taxes on future consumption (saving). In our baseline case of a unit intertemporal elasticity, optimal capital income tax rates are 2% on average and 4.5% on high earners. We find that the intertemporal elasticity of substitution has a substantial effect on optimal capital taxation. If the intertemporal elasticity is one-third, optimal capital income tax rates rise to 15% on average and 23% on high earners; if the intertemporal elasticity is two, optimal rates fall to 0.6% on average and 1.6% on high earners. Nevertheless, in all cases that we consider the welfare gains of using optimal capital taxes are small.
Check nearby libraries
Buy this book
![Loading indicator](/images/ajax-loader-bar.gif)
Showing 2 featured editions. View all 2 editions?
Edition | Availability |
---|---|
1
Preference heterogeneity and optimal capital income taxation
2011, Harvard Business School
in English
|
aaaa
Libraries near you:
WorldCat
|
2
Preference heterogeneity and optimal capital income taxation
2010, National Bureau of Economic Research
Electronic resource
in English
|
zzzz
|
Book Details
Edition Notes
"April 2011" -- Publisher's website.
Includes bibliographical references.
The Physical Object
ID Numbers
Work Description
"We examine a prominent justification for capital income taxation: goods preferred by those with high ability ought to be taxed. In an environment where commodity taxes are allowed to be nonlinear functions of income and consumption, we derive an analytical expression that reveals the forces determining optimal commodity taxation. We then calibrate the model to evidence on the relationship between skills and preferences and extensively examine the quantitative case for taxes on future consumption (saving). In our baseline case of a unit intertemporal elasticity, optimal capital income tax rates are 2% on average and 4.5% on high earners. We find that the intertemporal elasticity of substitution has a substantial effect on optimal capital taxation. If the intertemporal elasticity is one-third, optimal capital income tax rates rise to 15% on average and 23% on high earners; if the intertemporal elasticity is two, optimal rates fall to 0.6% on average and 1.6% on high earners. Nevertheless, in all cases that we consider the welfare gains of using optimal capital taxes are small"--National Bureau of Economic Research web site.
Community Reviews (0)
Feedback?History
- Created January 4, 2023
- 1 revision
Wikipedia citation
×CloseCopy and paste this code into your Wikipedia page. Need help?
January 4, 2023 | Created by MARC Bot | Imported from harvard_bibliographic_metadata record |