Wealth Taxes and Inequality
Nicola Borri and
Pietro Reichlin ()
No 13067, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We analyze the optimal combination of wealth and labor tax rates in a model where wealth-to-income ratios and wealth inequality are rising endogenously due to unbalanced technological improvement in a two-sector economy. We consider rich and poor households, financial and housing wealth, and find that a "realistic" optimal steady state tax structure includes some taxation of labor, zero taxation of financial wealth, a housing wealth tax on rich households and a housing wealth subsidy on poor households. These findings are robust with respect to variations in the housing demand elasticity.
Keywords: Housing; inequality; Wealth; Wealth Taxes (search for similar items in EconPapers)
JEL-codes: E21 E62 G1 H2 H21 (search for similar items in EconPapers)
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