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The total social benefits of college education exceed the private benefits because the government receives a share of the monetary returns in the form of income taxes. We study the policy implications of this fiscal externality in an optimal dynamic tax framework. Using a variational approach we...
Persistent link: https://www.econbiz.de/10013018704
We analyze optimal taxation of labor and capital income in a life-cycle framework with idiosyncratic income risk. We provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is independent of the social welfare function and...
Persistent link: https://www.econbiz.de/10013020515
We analyze Pareto-efficient tax breaks for personal taxation in a private information environment. In addition to a labor-leisure choice, the agents decide how to spend their money between consumption and work-related goods. We derive an efficiency condition that relates the rate of tax...
Persistent link: https://www.econbiz.de/10012967273
We study the incidence and the optimal design of nonlinear income taxes in a Mirrleesian economy with a continuum of endogenous wages. We characterize analytically the incidence of any tax reform by showing that one can mathematically formalize this problem as an integral equation. For a CES...
Persistent link: https://www.econbiz.de/10012979663