On the Optimal Progressivity of the Income Tax Code

@article{Conesa2002OnTO,
  title={On the Optimal Progressivity of the Income Tax Code},
  author={Juan Carlos Conesa and Dirk Krueger},
  journal={CEPR Discussion Paper Series},
  year={2002}
}
This paper computes the optimal progressivity of the income tax code in a dynamic general equilibrium model with household heterogeneity in which uninsurable labor productivity risk gives rise to a nontrivial income and wealth distribution. A progressive tax system serves as a partial substitute for missing insurance markets and enhances an equal distribution of economic welfare. These beneficial effects of a progressive tax system have to be traded o¤ against the e¢ciency loss arising from… Expand
Optimal Progressive Income Taxation in a Bewley-Grossman Framework
We study optimal income tax progressivity in an environment where individuals are exposed to idiosyncratic income and health risks over the lifecycle. Our results, based on a calibration for the USExpand
Optimal Progressive Income Taxation in a Bewley-Grossman Framework
We study optimal income tax progressivity in an environment where individuals are exposed to idiosyncratic income and health risks over the lifecycle. Our results, based on a calibration for the USExpand
Optimal nonlinear labor income taxation in dynamic economies
The aim of this paper is to explore the characteristics of the optimal nonlinear labor income tax in dynamic economies with information asymmetries and human capital accumulation. We develop aExpand
An Economic Analysis of the Progressivity of Income Taxes Using a Dynamic General Equilibrium Model
This paper explores the effect of the progressivity of income taxes on the distribution of income and consumption across households as well as the aggregate output in Korea. Using KoreanExpand
Optimal Progressivity of Personal Income Tax: A General Equilibrium Evaluation for Spain
Is the Spanish economy positioned at its optimal progressivity level in personal income tax? This article quantifies the aggregate, distributional, and welfare consequences of moving towards such anExpand
The Demand for Income Tax Progressivity in the Growth Model
This paper examines the degree of income tax progressivity chosen through a simple majority vote in a model with savings. Households have permanent differences with respect to their laborExpand
Heterogeneity and Government Revenues: Higher Taxes at the Top?
We evaluate the effectiveness of a more progressive tax scheme in raising government revenues. We develop a life-cycle economy with heterogeneity and endogenous labor supply. Households face aExpand
Heterogeneity and Government Revenues: Higher Taxes at the Top?
We evaluate the effectiveness of a more progressive tax scheme in raising government revenues. We develop a life-cycle economy with heterogeneity and endogenous labor supply. Households face aExpand
Optimal Tax Progressivity: An Analytical Framework
What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfectExpand
On the Optimality of Progressive Income Redistribution
We compute the optimal non-linear tax policy for a dynastic economy with uninsurable risk, where generations are linked by dynastic wealth accumulation and correlated incomes. Unlike earlier studies,Expand
...
1
2
3
4
5
...

References

SHOWING 1-10 OF 45 REFERENCES
Growth and welfare analysis of tax progressivity in a heterogeneous-agent model
In this paper, we use a general equilibrium model of endogenous growth in which there is heterogeneity in skill, income, and tax rates to evaluate the effect of progressivity of taxes on growth andExpand
Optimal Progressive Capital Income Taxes in the Infinite Horizon Model
This paper analyzes optimal progressive capital income taxation in an infinite horizon model where individuals differ only through their initial wealth. We consider progressive capital income taxExpand
On the Distributional Effects of Reducing Capital Taxes
We investigate the welfare implications of changing the mix between capital and labor taxes for a model economy in which heterogeneous households face uninsurable labor income risk. The stochasticExpand
Does the Progressivity of Taxes Matter for Economic Growth
A sizeable literature has argued that the growth effects of changes in flat rate taxes are small. In this paper, we investigate the relatively unexplored area of the growth effect of changes in theExpand
Optimal Fiscal Policy in Overlapping Generations Models
This paper analyzes the optimal fiscal policy in overlapping generation economies with production where agents live I periods. The primal approach is used to characterize the optimal taxes in steadyExpand
INDIVIDUAL INCOME TAX FUNCTIONS : AN EXPLORATORY EMPIRICAL ANALYSIS
Abstrad-We define and statistically estimate a nonlinear relationship between individual effective income tax ratet and economic income for United States tax return data for tax years 1979-89. TheExpand
Factor Taxation with Heterogeneous Agents
We investigate the welfare implications of changing the mix between capital and labor taxes for a model economy in which heterogeneous households face uninsurable labor income risk. The stochasticExpand
Flat tax reform: A quantitative exploration
This paper explores quantitatively the general equilibirum implications of a revenue neutral tax reform in which the current income and capital income tax structure in the U.S. is replaced by a flatExpand
Optimal Taxation in Life-Cycle Economies
We use a very standard life-cycle growth model, in which individuals have a labor-leisure choice in each period of their lives, to prove that an optimizing government will almost always find itExpand
Redistributive taxation as social insurance
Abstract The modern literature on nonlinear optimal taxation treats differences in income as being due to unobserved differences in ability. A striking result of this assumption is that high incomeExpand
...
1
2
3
4
5
...