reference levels relative to which are the changes in the level of wealth valued. Depending on the reference level, some results … indicate that it could be possible for a capital income tax increase not to stimulate risk taking even if the tax code provides … tax as a loss instead as a reduced gain. Then investor becomes risk seeking and moves away from the discomfort zone of …

-specific working-ability shocks and borrowing constraints, and so they differ ex post in both income and wealth. The combination of …-horizon growth model. To show how the model behaves in an application, the paper analyzes a 10 percent reduction in income tax rates …

preferences, and (ii) growth is endogenously sustained through innovations whose market value depends on the tax system. By … reallocating tax distortions through debt, fiscal policy alters both the composition of intertemporal consumption risk and the … incentives to innovate. Tax policies aimed at short-run stabilization may substantially increase long run tax and growth risks …

tax base is relatively unequal and inelastic; (2) an increasing pattern of labor income taxes over time mitigates … remaining third come mostly from insurance; and (5) redistribution also leads to a more efficient allocation of labor via wealth …