relation: https://publications.ut-capitole.fr/id/eprint/44175/
title: A fair day's pay for a fair day's work: optimal tax design as redistributional arbitrage
creator: Hellwig, Christian
creator: Werquin, Nicolas
subject: B- ECONOMIE ET FINANCE
description: We study optimal tax design based on the idea that policy-makers face trade-offs between multiple margins of redistribution. Within a Mirrleesian economy with earnings, consumption and retirement savings, we derive a novel formula for optimal income and savings distortions based on redistributional arbitrage. We establish a sufficient statistics representation of the labor income and capital tax rates on top income earners in dynamic environments, which relies on the observed distributions of both income and consumption. Because consumption has a thinner Pareto tail than income, our quantitative results suggest that it is optimal to shift a substantial fraction of the top earners' tax burden from income to savings.
publisher: TSE Working Paper
date: 2022-01
type: Monograph
type: NonPeerReviewed
format: text
language: en
identifier: https://publications.ut-capitole.fr/id/eprint/44175/1/wp_tse_1284.pdf
identifier:   Hellwig, Christian <https://www.idref.fr/190565152> and Werquin, Nicolas <https://www.idref.fr/22388863X>  (2022) A fair day's pay for a fair day's work: optimal tax design as redistributional arbitrage.  TSE Working Paper, n. 22-1284, Toulouse     
relation: http://tse-fr.eu/pub/126368
language: en