Non-linear Capital Taxation Without Commitment

By Emmanuel Farhi, Christopher Sleet, I. Werning, Sevin Yeltekin. 2012

113 citations recorded by the source corpus.

We study efficient nonlinear taxation of labor and capital in a dynamic Mirrleesian model incorporating political economy constraints. Policies are chosen sequentially over time, without commitment. Our main result is that the marginal tax on capital income is progressive, in the sense that richer agents face higher marginal tax rates.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/1871583099259e6c803fc661ba62e4dd5f1aff8d