Taxing Top Earners: A Human Capital Perspective

Alejandro Badel () and Mark Huggett
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Alejandro Badel: Federal Reserve Bank of St. Louis

No 2014-021, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: We assess the consequences of substantially increasing the marginal tax rate on U.S. top earners using a human capital model. We nd that (1) the peak of the model La er curve occurs at a 52 percent top tax rate, (2) if human capital were exogenous, then the top of the La er curve would occur at a 66 percent top tax rate and (3) applying the theory and methods that Diamond and Saez (2011) use to provide quantitative guidance for setting the top tax rate to model data produces a tax rate that substantially exceeds 52 percent.

Keywords: human capital; marginal tax rate; Inequality; Laffer curve (search for similar items in EconPapers)
JEL-codes: D91 E21 H20 J24 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-dge, nep-hrm, nep-lab, nep-mac and nep-pbe
Note: M
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Citations: View citations in EconPapers (17)

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http://humcap.uchicago.edu/RePEc/hka/wpaper/Badel_ ... xing-top-earners.pdf First version, October 2014 (application/pdf)

Related works:
Journal Article: Taxing Top Earners: a Human Capital Perspective (2020)
Working Paper: Taxing top earners: a human capital perspective (2014)
Working Paper: Taxing Top Earners: A Human Capital Perspective (2014)
Working Paper: Taxing Top Earners: A Human Capital Perspective (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2014-021

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