See the attached.

to be quantitatively small.

in initial wealth endowments, differences in …xed labor productivity and the accumulated effects of shocks realized after entry to the labor market.

We conduct a welfare analysis of redistributive labor taxation in a tractable heterogeneous-agents economy. We highlight four key considerations that determine the optimal overall progressivity of the tax schedule: (i) the preference weight on public consumption goods, (ii) the variance of...