On the optimality of progressive income redistribution
dc.contributor.author | Bakis, Ozan | |
dc.contributor.author | Kaymak, Baris | |
dc.date.accessioned | 2013-01-09T19:29:13Z | |
dc.date.available | 2013-01-09T19:29:13Z | |
dc.date.issued | 2012-08 | |
dc.identifier.uri | http://hdl.handle.net/1866/8855 | |
dc.publisher | Université de Montréal. Département de sciences économiques. | fr |
dc.subject | Intergenerational mobility | en |
dc.subject | Optimal taxation | en |
dc.subject | Progressive redistribution | en |
dc.subject | Incomplete markets | en |
dc.title | On the optimality of progressive income redistribution | en |
dc.type | Article | en |
dc.contributor.affiliation | Université de Montréal. Faculté des arts et des sciences. Département de sciences économiques | |
dcterms.abstract | We compute the optimal non-linear tax policy for a dynastic economy with uninsurable risk, where generations are linked by dynastic wealth accumulation and correlated incomes. Unlike earlier studies, we find that the optimal long-run tax policy is moderately regressive. Regressive taxes lead to higher output and consumption, at the expense of larger after-tax income inequality. Nevertheless, equilibrium effects and the availability of self-insurance via bequests mitigate the impact of regressive taxes on consumption inequality, resulting in improved average welfare overall. We also consider the optimal once-and-for-all change in the tax system, taking into account the transition dynamics. Starting at the U.S. status quo, the optimal tax reform is slightly more progressive than the current system. | en |
dcterms.isPartOf | urn:ISSN:0709-9231 | |
dcterms.language | eng | en |
UdeM.VersionRioxx | Version publiée / Version of Record | |
oaire.citationTitle | Cahier de recherche | |
oaire.citationIssue | 2012-09 |
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