Optimal Wealth Taxes with Risky Human Capital

@article{Grochulski2005OptimalWT,
  title={Optimal Wealth Taxes with Risky Human Capital},
  author={Borys Grochulski and Tomasz Piskorski},
  journal={ERN: Efficiency; Optimal Taxation (Topic)},
  year={2005}
}
We study the structure of optimal wealth and labor income taxes in a Mirrlees economy in which the productivity of labor (i.e., skill) is private, stochastic, and endogenous. Individual agents' skills are determined by their level of human capital. Human capital is not publicly observable and the returns to human capital investment are subject to idiosyncratic shocks. Preferences are not assumed to be additively separable in consumption and human capital investment and, thus, the intertemporal… 
The Dynamics of Optimal Taxation when Human Capital is Endogenous
This paper characterizes the dynamics of Pareto efficient income taxes in a dynamic economy with human capital accumulation. I extend the tools and insights developed by Mirrlees (1971) into a
Risky Human Capital and Deferred Capital Income Taxation
TLDR
A tractable life-cycle model of human capital evolution with risky investment and stochastic depreciation is constructed, demonstrating the optimality of a human capital premium and the necessity of deferred taxation of physical capital.
Optimal Taxation in a Life-Cycle Economy with Endogenous Human Capital Formation
We study efficient allocations and optimal policies in a life-cycle economy with risky human capital accumulation. The agents are ex-ante heterogeneous in their initial human capital and in their
Optimal Taxation of Entrepreneurial Capital with Private Information
This paper studies optimal taxation of entrepreneurial capital with private information and multiple assets. Entrepreneurial activity is subject to a dynamic moral hazard problem and entrepreneurs
Human capital and optimal positive taxation of capital income
This paper analyzes optimal linear and non-linear taxes on capital and labor incomes in a life-cycle model of human capital investment, financial savings, and labor supply with heterogenous
Optimal Taxation of Entrepreneurial Capital Under Private Information
This paper studies optimal taxation of entrepreneurial capital and financial assets in economies with private information. Returns to entrepreneurial capital are risky and depend on entrepreneurs’
1 . 1 Relation to the Literature
We analyze optimal income taxes and optimal schooling subsidies in a dynamic private information economy with observable human capital accumulation. We show that the marginal schooling subsidies are,
Education, preferences for leisure and the optimal income tax schedule
Abstract This paper characterizes optimal income taxes and human capital policies in a two period Mirrlees economy. Agents, differentiated by their preferences at birth, invest in human capital not
Human Capital and Public Policy
This article surveys the theoretical and empirical literature on investment in human capital and the effect of public policies. Empirical literature shows that education carries considerable amount
The interaction between unemployment insurance and human capital policies
In the presence of an optimally designed unemployment bene.t system we show that it is optimal for the government to encourage human capital acquisition. The driving force of this result is the
...
1
2
...

References

SHOWING 1-10 OF 24 REFERENCES
ZERO EXPECTED WEALTH TAXES: A MIRRLEES APPROACH TO DYNAMIC OPTIMAL TAXATION
In this paper, I consider a dynamic economy in which a government needs to finance a stochastic process of purchases. The agents in the economy are privately informed about their skills, which evolve
Dynamic Optimal Taxation with Private Information
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
Optimal Taxation of Entrepreneurial Capital Under Private Information
This paper studies optimal taxation of entrepreneurial capital and financial assets in economies with private information. Returns to entrepreneurial capital are risky and depend on entrepreneurs’
On the Optimal Taxation of Capital Income
One of the best known results in modern public finance is the Chamley-Judd result showing that the optimal tax rate on capital income is zero in the long-run. In this paper, we reexamine this result
Consumption vs. income taxes when private human capital investments are imperfectly observable
Abstract This paper considers optimal taxation in an endogenous growth model where private education investments are imperfectly observable. Consumption taxation is better than labor income taxation
Inequality , Social Discounting and Progressive Estate Taxation ∗
To what degree should societies allow inequality to be inherited? What role should estate taxation play in shaping the intergenerational transmission of welfare? We explore these questions by
Risk and Market Frictions as Determinants of the Human Capital Premium Ignacio Palacios-Huerta
This paper studies the dynamic relationship between consumption and human capital investments. We find that the riskiness of human capital investments alone is not enough to justify the premium on
The Intergenerational State: Education and Pensions
When credit markets to finance investment in the human capital of young people are missing, the competitive equilibrium allocation is inefficient. When generations overlap, this failure can be
An Exploration in the Theory of Optimum Income Taxation
you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal,
Optimal indirect and capital taxation
In this paper, we consider an environment in which agents? skills are private information, are potentially multi-dimensional, and follow arbitrary stochastic processes. We allow for arbitrary
...
1
2
3
...