Non-linear Capital Taxation Without Commitment

Emmanuel Farhi, Christopher Sleet, Iván Werning and Sevin Yeltekin ()

The Review of Economic Studies, 2012, vol. 79, issue 4, 1469-1493

Abstract: We study efficient non-linear taxation of labour and capital in a dynamic Mirrleesian model incorporating political economy constraints. Policies are chosen sequentially over time, without commitment. Our main result is that the marginal tax on capital income is progressive, in the sense that richer agents face higher marginal tax rates. Copyright , Oxford University Press.

Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:79:y:2012:i:4:p:1469-1493

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