When individuals' labor and capital income are subject to uninsurable idiosyncratic risks, should capital and labor be … optimal taxes on capital and labor depends on the nature of the shocks, the degree of heterogeneity among consumers' income … labor income and heterogeneity is small, the optimal tax on capital is positive. However, in other cases, a negative tax on …

) taxation, while a large part of the tax competition literature views business taxes as unit (wealth) taxation. We point to the … dual role that corporate taxation plays in attracting mobile capital, on the one hand, and in absorbing economic rents, on …