This paper shows that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 60%, which is significantly higher than the optimal rate of 48% in an identically calibrated model without...

This paper shows that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 60%, which is significantly higher than the optimal rate of 48% in an identically calibrated model without...

This paper studies optimal taxation of bequests in a model where altruistic parents and their offspring disagree on the offspring's labor supply decision. I show that whenever offspring is too lazy from the parent's perspective and there are income effects on labor supply, optimal policy...

This paper studies optimal distribution of skills in an optimal income tax framework with convex skill constraints. The problem is cast as a social planning problem where a redistributive planner chooses how to distribute a given amount of aggregate skills across people. We find that optimal...

People are heterogeneous in the skills by which they turn effort into output. A central question in normative public economics is how to redistribute resources from more- to less-skilled individuals efficiently. In addition to income taxation, this paper considers another policy tool of...