The Experts below are selected from a list of 18381 Experts worldwide ranked by ideXlab platform

Stefania Albanesi - One of the best experts on this subject based on the ideXlab platform.

  • Selection and Incentives: Optimal Taxation with Occupational Choice and Private Information
    2008
    Co-Authors: Stefania Albanesi
    Abstract:

    This paper examines Optimal Taxation of capital and labor income in a dynamic model with occupational choice.(This abstract was borrowed from another version of this item.)

  • Selection and Incentives: Optimal Taxation with Occupational Choice and Private Information
    2008
    Co-Authors: Stefania Albanesi
    Abstract:

    This paper examines Optimal Taxation of capital and labor income in a dynamic model with occupational choice.

  • Dynamic Optimal Taxation of Households
    2008
    Co-Authors: Stefania Albanesi, Nicola Pavoni
    Abstract:

    The explicit consideration of households also seeks to make a contribution to the emerging literature on dynamic Optimal Taxation with private information. One of the basic tenets of this approach is that normative analyses of government policies should consider constraints deriving from intrinsic frictions, such as the inability to observe individual productivities, so that relevant trade-offs are not unknowingly left out. Yet, this literature has so far ignored the presence of households, perhaps the most fundamental and pervasive institution in the economic system. While some features of households are unique, the proposed analysis may provide useful insights on the significance of other long-run relations between individuals, such as the one between employer and employee, for the design of Optimal tax policy.

  • Dynamic Optimal Taxation with Private Information
    Review of Economic Studies, 2006
    Co-Authors: Stefania Albanesi, Christopher Sleet
    Abstract:

    We study dynamic Optimal Taxation in a class of economies with private information. Optimal allocations in these environments are complicated and history-dependent. Yet, we show that they can be implemented as competitive equilibria in market economies supplemented with simple tax systems. The market structure in these economies is similar to that in Bewley (1986); agents supply labour and trade risk-free claims to future consumption, subject to a budget constraint and a debt limit. Optimal taxes are conditioned only on two observable characteristics—an agent’s accumulated stock of claims, or wealth, and her current labour income. We show that Optimal taxes are generally non-linear and non-separable in these variables and relate the structure of marginal wealth and income Taxation to the properties of agent preferences. This paper studies Optimal Taxation in a class of dynamic economies with private information. We consider an environment in which agents’ preferences are defined over consumption and labour, and each agent receives a privately observed sequence of i.i.d. preference shocks. Incentivecompatibility constraints stemming from private information imply that socially Optimal, or constrained‐efficient, allocations in this environment are complicated and history-dependent. Yet, we show that they can be implemented as competitive equilibria in market economies supplemented with simple tax systems. The market structure in these economies is identical to that in Bewley (1986), Huggett (1993) or Aiyagari (1994); agents can trade current consumption for claims to future consumption, subject to a budget constraint and a borrowing limit. These claims have a non-contingent pre-tax return. Crucially, taxes are conditioned upon only two observable characteristics of an agent: current wealth, given by the agent’s accumulated stock of claims, and current labour income. They do not depend on any other aspect of an agent’s past history. Most models of dynamic Optimal Taxation follow the Ramsey approach, in which the set of fiscal instruments available to the government is exogenously specified. 1 Linear labour and capital income taxes are typically included in this set, while lump-sum taxes are ruled out. The exclusion of the latter is justified by appealing to incentive or administrative constraints, but these are not explicitly modelled. These exogenous restrictions on fiscal instruments represent frictions that the government seeks to ameliorate through its Optimal choice of tax rates. The approach we adopt in this paper builds on the Optimal Taxation literature initiated by Mirrlees (1971). Mirrlees assumes that agents receive privately observed shocks to their

  • dynamic Optimal Taxation with private information
    2003
    Co-Authors: Stefania Albanesi, Christopher Sleet
    Abstract:

    We study dynamic Optimal Taxation in a class of economies with private information. Constrained Optimal allocations in these environments are complicated and history-dependent. Yet, we show that they can be attained as competitive equilibria in market economies supplemented with simple tax systems. The market structure in these economies is identical to that in Bewley (1986): agents can trade current consumption and risk-free claims to future consumption, subject to a budget constraint and a debt limit. The tax system describes additional transfers that the agents must make to the government. It conditions them upon only two observable characteristics of an agent: their accumulated stock of claims, or wealth, and their current labour income. It implies Optimal tax functions that are not additively separable in these variables. The marginal wealth tax is negatively correlated with income and its expected value is generally positive. The marginal income tax is decreasing in wealth.

Tomas Sjögren - One of the best experts on this subject based on the ideXlab platform.

Firouz Gahvari - One of the best experts on this subject based on the ideXlab platform.

  • Uncertainty and Optimal Taxation: In defense of commodity taxes ∗
    Journal of Public Economics, 1995
    Co-Authors: Helmuth Cremer, Firouz Gahvari
    Abstract:

    Abstract This paper re-examines the theory of Optimal commodity Taxation in the presence of a linear income tax, under wage uncertainty. There are two categories of goods: the consumption levels in one group are committed to before the resolution of uncertainty and those of the other after. The paper (i) characterizes the structure of the Optimal commodity taxes in view of the insurance they provide against random wage movements, (ii) proves that Optimal Taxation requires a mix of differential commodity taxes and a uniform lump-sum tax, and (iii) demonstrates that the post-uncertainty goods should face a positive tax rate which is higher than the tax rate on the pre-committed goods.

Marek Kapicka - One of the best experts on this subject based on the ideXlab platform.

  • Optimal Taxation with persistent shocks
    2004
    Co-Authors: Marek Kapicka
    Abstract:

    In this paper I study dynamic Optimal Taxation in a private information economy with continuum of individual productivity shocks that are persistent over time. I formulate the problem recursively and develop a first order approach in the spirit of Mirrlees (1971) to simplify it. The main advantage of the first order approach lies in the fact that it allows us to reduce the state space of the dynamic program dramatically. This allows numerical implementation of the problem. I solve quantitatively for the Optimal capital income taxes in a simplified economy with persistent taste shocks. I find that whan the shocks follow random walk, the intertemporal wedge, roughly corresponding to the capital income taxes, is on average about three times lower than in the case of iid shocks.

  • Optimal Taxation with Persistent Shocks: A First Order Approach
    2004
    Co-Authors: Marek Kapicka
    Abstract:

    In this paper I study dynamic Optimal Taxation in a private information economy with continuum of individual productivity shocks that are persistent over time. I show that the optimum can be implemented in a competitive equilibrium by a simple tax system where taxes on wealth and income depend on current wealth and income and last period wealth and income. I formulate the problem recursively and develop a first order approach in the spirit of Mirrlees (1971) to simplify it. The main advantage of the first order approach lies in the fact that it allows us to reduce the state space of the dynamic program dramatically. This allows numerical implementation of the problem. I solve quantitatively for the Optimal capital income taxes in a simplified economy with persistent taste shocks. I find that when the shocks have autocorrelation of 0.75, the intertemporal wedge, is significantly increased, as compared to the i.i.d. shock case.

Nathalie Mathieu-bolh - One of the best experts on this subject based on the ideXlab platform.

  • Optimal Taxation and Income Mobility with Borrowing Limits
    Public Finance Review, 2011
    Co-Authors: Nathalie Mathieu-bolh
    Abstract:

    The author studies age-dependent Optimal Taxation in an environment that takes into consideration changes in consumption behavior over the life cycle due to changes in labor income paths and borrowing limits. Income mobility is defined as an exogenous rate at which individuals change from a low-to a high-income path. In this framework, the role of age-dependent income Taxation is reinforced. Consumption and leisure Optimal allocations are not constant over the life cycle even when preferences are additively separable. As a result, age-dependent Optimal capital income Taxation faced by high-income earners differs from zero for all forms of preferences. In addition, past environments used to study Optimal Taxation appear as special cases of the proposed model. When the rate of income mobility is infinite, the proposed model nests the simple finite horizon framework. When life expectancy is infinite, the model nests the infinite horizon framework.

  • Optimal Taxation and Borrowing Constraints
    2011
    Co-Authors: Nathalie Mathieu-bolh
    Abstract:

    I propose a new overlapping generations model, in which individuals face different income levels, life expectancies and borrowing constraints to study Ramsey Optimal Taxation. Contrary to previous contributions, I find that Optimal capital income Taxation generally differs from zero in the long term even when preferences are additively separable. I also find that the tax system should generally incorporate a progressive capital income tax in the long run. Furthermore, the model enables to disentangle the respective roles of finite life horizons, productivity differences and borrowing limits.