OECD countries 1992-2007. We focus on risk sharing through savings, factor income flows, and capital gains. Risk sharing … through factor income and capital gains was close to zero before 1999 but has increased since then. Risk sharing from capital … gains, at about 6 percent, is higher than risk sharing from factor income flows for European Union countries and OECD …

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 determined by the degree of income risk and risk aversion. The optimal linear …