Optimal indirect and capital taxation

Michael Golosov, Narayana Kocherlakota () and Aleh Tsyvinski

No 615, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: In this paper, we consider an environment in which agents’ productivities are private information, potentially multi-dimensional, and follow arbitrary stochastic processes. We allow for arbitrary incentive-compatible and physically feasible tax schemes. We prove that it is typically Pareto optimal to have positive capital taxes. As well, we prove that in any given period, it is Pareto optimal to tax consumption goods at a uniform rate.

Keywords: Taxation (search for similar items in EconPapers)
Date: 2001
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Published in Federal Reserve Bank of Minneapolis Staff Report 293

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Related works:
Working Paper: Optimal indirect and capital taxation (2001)
Working Paper: Optimal Indirect and Capital Taxation (2002)
Journal Article: Optimal Indirect and Capital Taxation (2003)
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