literatures, is elaborated and then considered with regard to the problem of transition to a consumption tax. Other transition … issues are distinguished, and specific attention is devoted to rate changes under a consumption tax and whether owners of … preexisting capital are effectively compensated through higher net-of-tax returns due to repeal of the income tax. The analysis is …

We highlight and explain eight lessons from optimal tax theory and compare them to the last few decades of OECD tax … policy. As recommended by theory, top marginal income tax rates have declined, marginal income tax schedules have flattened …. However, trends in capital taxation are mixed, and capital income tax rates remain well above the zero level recommended by …

The 1993 tax legislation raised marginal tax rates to 36 percent from 31 percent on taxable incomes between $140 … by adjusted gross income class to analyze how the 1993 tax rate increases affected taxable income, tax revenue, and … reported 7.8 percent more taxable income in 1993 than they did if their tax rates had not increased. Because of the high …

This paper computes the optimal progressivity of the income tax code in a dynamic general equilibrium model with …. 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 off against the efficiency …

, standard second-best results in basic settings are unaffected, except those for the optimal income tax. Optimal levels of …

In this paper we quantitatively characterize the optimal capital and labor income tax in an overlapping generations … supply and capital accumulation decision. We find that in our model the optimal capital income tax rate is significantly … positive. The optimal (marginal and average) tax rate on capital is 36%, in conjunction with a progressive labor income tax …

Using micro-level data, we examine the effects of Russia's 2001 flat rate income tax reform on consumption, income, and … tax evasion. We use the gap between household expenditures and reported earnings as a proxy for tax evasion with data from … find that large and significant changes in tax evasion following the flat tax reform are associated with changes in …

fair social security have the highly distortionary effect of a tax on top of an existing tax (the income tax) because … respects, even with myopia, social security has qualitatively different effects than those of a tax levied on top of an … existing tax. Both social security and capital taxation may cause labor supply to rise or fall when individuals are myopic …