High Marginal Tax Rates on the Top 1 Percent? Lessons from a Life-Cycle Model with Idiosyncratic Income Risk

• 成果类型: Article
• 署名作者: Kindermann, Fabian; Krueger, Dirk
• 署名单位: University of Regensburg; Centre for Economic Policy Research - UK; Tilburg University; University of Regensburg; University of Pennsylvania; National Bureau of Economic Research; University of Pennsylvania
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.20150170
• 发表日期: 2022
• 页码: 319-366
• 关键词: optimal progressivity; optimal taxation; capital income; Heterogeneity; POLICY; entrepreneurship; INEQUALITY; insurance; earnings; US

摘要

This paper argues that high marginal labor income tax rates on top earners are an effective tool for social insurance even when households have high labor supply elasticity, households make dynamic savings decisions, and policies have general equilibrium effects. We construct a large-scale overlapping generations model with uninsurable labor productivity risk, show that it has a realistic wealth distribution, and numerically characterize the optimal top marginal rate. We find that marginal tax rates for top 1 percent earners of 79 percent are optimal as long as the model earnings and wealth distributions display a degree of concentration as observed in US data.