This paper analyzes Pareto optimal taxation of labor and capital income in a lifecycle framework with private …. We show that the optimal linear capital tax rate is non-zero and derive a simple formula, which trades off redistributive … insurance component contributes significantly to optimal labor tax rates. Optimal capital taxes are significant and yield …

According to the existing literature, capital taxes should not be imposed in the presence of optimal profit taxation in … non-distortionary profit taxation it is optimal for such an economy to tax capital if the revenue share of capital in the … unionised sector is lower than the revenue share of capital in the competitive sector. This is because taxing capital income …

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 …

enough political support in the future. We find that optimal marginal capital taxes are either progressive or U-shaped, so … that savings are subsidized for the poor and/or the middle class but are taxed for the rich. U-shaped capital taxes always … emerge when the salient reform threat consists of radically redistributing capital and individuals' political behavior is …