provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is … capital tax is non-zero and trades off redistribution and insurance against savings distortions. Our quantitative results … reveal that the insurance component contributes significantly to optimal labor tax rates and provides an informative lower …

lifetime earnings between individuals with different skill endowments and by providing individuals with insurance against … risk. Progressive taxation of annual earnings provides little insurance against lifetime earnings risk. The lifetime … insurance effects of taxation may be improved by moving to a progressive tax on lifetime earnings. Similarly, the lifetime …

, a substantial share of annual redistribution might turn out to serve individual insurance in a longer perspective …

partial) insurance against idiosyncratic income shocks, but at the expense of labor supply distortions. A reform which links … pensions to individual incomes reduces distortions associated with social security contributions, but incurs insurance loss. We … insurance loss. …