Pareto-Improving Optimal Capital and Labor Taxes
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- dc.contributor.author Greulich, Katharina
- dc.contributor.author Laczó, Sarolta
- dc.contributor.author Marcet, Albert
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:09:45Z
- dc.date.available 2024-11-14T10:09:45Z
- dc.date.issued 2022-01-02
- dc.date.modified 2024-11-14T10:08:30Z
- dc.description.abstract We study optimal Pareto-improving factor taxation when agents are heterogeneous in their labor productivity and wealth and markets are complete. Pareto-improving policies require a gradual reform: labor taxes should be cut, and capital taxes should remain high for a long time before reaching the limit. This policy redistributes wealth in favor of workers, promotes growth, and causes early deficits and government debt in the long run. We address several technical issues, such as sufficiency of Lagrangian solutions in a Ramsey problem, their relation to welfare functions, and solution algorithms. We also provide a proof that long-run capital taxes are zero.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1825
- dc.identifier.citation Journal of Political Economy, 131 (7), 2023, 1904-1946
- dc.identifier.uri http://hdl.handle.net/10230/68598
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1825
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword fiscal policy
- dc.subject.keyword factor taxation
- dc.subject.keyword pareto-improving tax reform
- dc.subject.keyword redistribution
- dc.subject.keyword Macroeconomics and International Economics
- dc.title Pareto-Improving Optimal Capital and Labor Taxes
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper