optimum. In one implementation there is a common labor income tax schedule, and a repayment schedule for government loans … given out to agents during education. These repayment plans are contingent on loan size and income and capture the history … graduates as a function of income lies first strictly above their counterparts from high-school, but this reverses at higher …

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 …