Nonlinear Capital Taxation Without Commitment

Author(s)
Werning, Ivan; Farhi, Emmanuel; Sleet, Christopher; Yeltekin, Sevin
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Non-linear Capital Taxation Without Commitment
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Abstract
We study efficient non-linear taxation of labour 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.
Date issued
2012-01
URI
http://hdl.handle.net/1721.1/82875
Department
Massachusetts Institute of Technology. Department of Economics
Journal
The Review of Economic Studies
Publisher
Oxford University Press
Citation
Farhi, E., C. Sleet, I. Werning, and S. Yeltekin. “Non-linear Capital Taxation Without Commitment.” The Review of Economic Studies 79, no. 4 (October 18, 2012): 1469-1493.
Version: Author's final manuscript
ISSN
0034-6527
1467-937X
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