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The Optimal Amount of Attention to Capital Income Risk and Heterogeneous Precautionary Saving Behavior

Yin, Penghui - 2019

uninsured capital income risk, and suffer from an information-processing capacity constraint. For given attention devoted to … capital income risk, we solve for the optimal consumption-saving choices and show that the expected welfare is increasing with … capacity, assuming a relative risk aversion degree larger than unity. Furthermore, we solve for attention choice and find that …

Persistent link: https://www.econbiz.de/10012892117

Bunching and Rank-Dependent Optimal Income Taxation

Simula, Laurent - 2020

We consider optimal non-linear income tax problems when the social welfare function only depends on ranks as in Yaari (1987) and weights agree with the Lorenz quasi-ordering. Gini, S-Gini, and a class putting more emphasis on inequality in the upper part of the distribution belong to this set....

Persistent link: https://www.econbiz.de/10012827661

Optimal Taxation of Robots

Thuemmel, Uwe - 2019

I study the optimal taxation of robots and labor income. In the model, robots substitute for routine labor and complement non-routine labor. I show that while it is optimal to distort robot adoption, robots may be either taxed or subsidized. The robot tax exploits general-equilibrium effects to...

Persistent link: https://www.econbiz.de/10012892266

Jointly Optimal Taxes for Different Types of Income

Hermle, Johannes - 2018

We develop and estimate a model of jointly optimal income taxes for different types of income. Compared to standard optimal tax formulas, optimal schedular income tax rates additionally depend on cross-elasticities between tax bases capturing fiscal externalities. We discuss two applications:...

Persistent link: https://www.econbiz.de/10012908643

Correct Me If You Can - Optimal Non-Linear Taxation of Internalities

Gerster, Andreas - 2019

A growing literature has shown that behavioral biases influence consumer choices. Such so-called internalities are ubiquitous in many settings, including energy efficiency investments and the consumption of sin goods, such as cigarettes and sugar. In this paper, we use a mechanism design...

Persistent link: https://www.econbiz.de/10012866315

The Equal-Sacrifice Social Welfare Function with an Application to Optimal Income Taxation

Berg, Kristoffer - 2020

We propose and axiomatically characterize a family of welfare criteria that prioritize individuals making larger sacrifices. By combining efficiency with a concern for equality of sacrifice, our criteria avoid serious shortcomings of utilitarianism. We illustrate our results within the...

Persistent link: https://www.econbiz.de/10012824737

Gini and Optimal Income Taxation by Rank

Simula, Laurent - 2020

We solve the non-linear income tax program for a rank-dependent social welfare function Ã la Yaari, expressing the trade-off between size and inequality using the Gini or related families of positional indices. The key idea is that when agents optimize and absent bunching, ranks in the actual...

Persistent link: https://www.econbiz.de/10012839709

Monopsony Power, Income Taxation and Welfare

Hummel, Albert Jan - 2021

This paper studies the implications of monopsony power for optimal income taxation and welfare. Firms observe workers’ abilities while the government does not and monopsony power determines what share of the labor market surplus is translated into profits. Monopsony power increases the tax...

Persistent link: https://www.econbiz.de/10013224073

Optimal Taxation with Multiple Incomes and Types

Spiritus, Kevin; Lehmann, Etienne; Renes, Sander; … - 2022

We analyze the optimal nonlinear income tax schedule when taxpayers earn multiple incomes and differ along many unobserved dimensions. We derive the necessary conditions for the government’s optimum using both a tax perturbation and a mechanism design approach, and show that both methods...

Persistent link: https://www.econbiz.de/10013307212

Who Should Bear the Burden of COVID-19 Related Fiscal Pressure? An Optimal Income Taxation Perspective

Ayaz, Mehmet; Fricke, Lea; Fuest, Clemens; Sachs, Dominik - 2021

The COVID-19 pandemic has led to an increase in public debt in most countries. This will increase fiscal pressure in the future. We study how the shape of the optimal nonlinear income tax schedule is affected by this increase. We calibrate the workhorse optimal income tax model to five European...

Persistent link: https://www.econbiz.de/10013313446