Optimal top marginal tax rates under income splitting for couples

Viktor Steiner, Giacomo Corneo and Stefan Bach

No 8435, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper analytically derives optimal top marginal tax rates when couples are taxed according to income splitting between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are then quantified for Germany. Estimation results based on an exhaustive dataset of top taxpayers suggest that the optimal asymptotic tax rate is close to 2/3 and only applies to incomes that are considerably higher than those currently subject to the actual top tax rate.

Keywords: Optimal income tax; Top incomes (search for similar items in EconPapers)
JEL-codes: D31 D72 H23 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-acc and nep-pub
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Citations: View citations in EconPapers (12)

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Journal Article: Optimal top marginal tax rates under income splitting for couples (2012)
Working Paper: Optimal top marginal tax rates under income splitting for couples (2011)
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