Optimal income taxation when asset taxation is limited

• 成果类型: Article
• 署名作者: Abraham, Arpad; Koehne, Sebastian; Pavoni, Nicola
• 署名单位: European University Institute; Stockholm University; Leibniz Association; Ifo Institut; Bocconi University; Bocconi University; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.02.003
• 发表日期: 2016
• 页码: 14-29
• 关键词: Optimal income taxation; capital taxation; progressivity

摘要

Several frictions restrict the government's ability to tax assets. First, it is very costly to monitor trades on international asset markets. Second, agents can resort to nonobservable low-return assets such as cash, gold or foreign currencies if taxes on observable assets become too high. This paper shows that limitations in asset taxation have important consequences for the taxation of labor income. We study a simple dynamic moral hazard model of social insurance with observable and nonobservable saving decisions. We find that optimal labor income taxes become less progressive when the ability to tax savings is limited. (C) 2016 Elsevier B.V. All rights reserved.