Optimal Taxation With Human Capital
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Author | : Zuliu Hu |
Publisher | : International Monetary Fund |
Total Pages | : 22 |
Release | : 1992-12-01 |
Genre | : Business & Economics |
ISBN | : 1451947429 |
Download Risk-Taking and Optimal Taxation with Nontradable Human Capital Book in PDF, Epub and Kindle
What are the effects of taxation on individual/entrepreneurs’ risk-taking behavior? This paper re-examines this old question in a continuous time life-cycle model. We demonstrate that the stream of uncertain income from human capital has systematic effects on demand for the risky physical capital asset. If labor supply is inelastic and real wages are known with certainty, then a labor income tax will reduce holdings of the risky physical asset. However, if there are random fluctuations in labor income, then the effect depends on the nature of interaction between wage risk and investment income risk. A labor income tax may actually raise demand for the risky capital asset if human capital risk and physical capital risk are positively correlated. The idiosyncratic risk and nontradability of human capital also have implications for optimal taxation. When the insurance and disincentive effects are jointly taken into account, a Pareto efficient tax structure implies a strictly positive tax rate.
Author | : Claudia Hermeling |
Publisher | : |
Total Pages | : 148 |
Release | : 2006 |
Genre | : |
ISBN | : 9783866241664 |
Download Optimal Taxation with Human Capital Book in PDF, Epub and Kindle
Author | : Mr.Gian Milesi-Ferretti |
Publisher | : International Monetary Fund |
Total Pages | : 37 |
Release | : 1994-07-01 |
Genre | : Business & Economics |
ISBN | : 145184994X |
Download Taxation and Endogenous Growth in Open Economies Book in PDF, Epub and Kindle
This paper examines the effects of taxation of human capital, physical capital and foreign assets in a multi-sector model of endogenous growth. It is shown that in general the growth rate is reduced by taxes on capital and labor (human capital) income. When the government faces no borrowing constraints and is able to commit to a given set of present and future taxes, it is shown that the optimal tax plan involves high taxation of both capital and labor in the short run. This allows the government to accumulate sufficient assets to finance spending without any recourse to distortionary taxation in the long run. When restrictions to government borrowing and lending are imposed, the model implies that human and physical capital should be taxed similarly.
Author | : |
Publisher | : |
Total Pages | : |
Release | : 2015 |
Genre | : |
ISBN | : 9788073443580 |
Download Optimal Taxation with Risky Human Capital Book in PDF, Epub and Kindle
Author | : Christoph Braun |
Publisher | : |
Total Pages | : 178 |
Release | : 2011 |
Genre | : |
ISBN | : |
Download Optimal Taxation of Human Capital Book in PDF, Epub and Kindle
Author | : Jonathan Eaton |
Publisher | : |
Total Pages | : 56 |
Release | : 1979 |
Genre | : Human capital |
ISBN | : |
Download Taxation, Human Capital, and Uncertainty Book in PDF, Epub and Kindle
Author | : Nouriel Roubini |
Publisher | : |
Total Pages | : 48 |
Release | : 1994 |
Genre | : Capital |
ISBN | : |
Download Optimal Taxation of Human and Physical Capital in Endogenous Growth Models Book in PDF, Epub and Kindle
Author | : Larry E. Jones |
Publisher | : |
Total Pages | : 56 |
Release | : 1993 |
Genre | : Capital gains tax |
ISBN | : |
Download On the Optimal Taxation of Capital Income Book in PDF, Epub and Kindle
One of the best known results in modern public finance is the Chamley-Judd result showing that the optimal tax rate on capital income is zero in the long-run. In this paper, we reexamine this result by analyzing a series of generalizations of the Chamley-Judd formulation. We show that in a model with human capital, if the tax code is sufficiently rich and there are no pure profits from accumulating human capital, then all distorting taxes are zero in the long-run under the optimal plan. In this sense, income from physical capital is not special. To gain a better understanding of these two conditions, we study examples in which they are not satisfied and show that the optimal tax rate on income from physical capital does not go to zero. In those cases where the limiting tax rate is non-zero, we calculate its value for alternative specifications of the marginal welfare cost of taxation. Our results indicate that even for conservative specifications, tax rates of 10% and higher are possible under the optimal code.
Author | : Nicholas Bull |
Publisher | : |
Total Pages | : 290 |
Release | : 1992 |
Genre | : |
ISBN | : |
Download Optimal Taxation in an Endogenous Growth Model with Human Capital Book in PDF, Epub and Kindle
Author | : Fatih Guvenen |
Publisher | : DIANE Publishing |
Total Pages | : 57 |
Release | : 2010-10 |
Genre | : Business & Economics |
ISBN | : 1437934900 |
Download Taxation of Human Capital and Wage Inequality Book in PDF, Epub and Kindle
Wage inequality has been significantly higher in the U.S. than in continental European countries since the 1970s. This report studies the role of labor income tax policies (LITP) for understanding these facts. Countries with more progressive LITP have significantly lower before-tax wage inequality at different points in time. Progressivity is also negatively correlated with the rise in wage inequality during this period. Wage inequality arises from differences across individuals in their ability to learn new skills as well as from idiosyncratic shocks. Progressive taxation compresses the (after-tax) wage structure, thereby distorting the incentives to accumulate human capital, in turn reducing the cross-sectional dispersion of (before-tax) wages. Illustrations. This is a print-on-demand publication; it is not an original.