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Joint Macroeconomics & Public Economics Workshop - Stefanie Stantcheva

Thu, 03/02/2017 - 11:40am

Stefanie Stantcheva

Harvard University

498 Uris Hall

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This paper develops a theory of optimal capital taxation with optimal tax formulas in sufficient statistics. We first consider a simple model with utility linear in consumption and heterogeneous utility for wealth. The steady-state is reached immediately and has finite elasticities of capital with respect to taxes. We address several policy issues. Our optimal tax formulas have the advantage of being easily taken to the data to simulate optimal taxes, which we do using U.S. tax return data on labor and capital incomes. Second, we show how these results can be extended to a much broader class of models.

Event Categories: Macroeconomics