Data and Code for: High Marginal Tax Rates on the Top 1%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk
Principal Investigator(s): View help for Principal Investigator(s) Dirk Krueger, University of Pennsylvania. Department of Economics; Fabian Kindermann, University of Regensburg. Department of Economics
Version: View help for Version V1
| Name | File Type | Size | Last Modified |
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| figures | 01/06/2021 03:01:AM | ||
| simulation_model | 01/06/2021 03:05:AM | ||
| tables | 01/06/2021 03:05:AM | ||
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application/pdf | 55 KB | 01/05/2021 10:09:PM |
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application/pdf | 98.9 KB | 01/05/2021 10:01:PM |
Project Citation:
Krueger, Dirk, and Kindermann, Fabian. Data and Code for: High Marginal Tax Rates on the Top 1%? Lessons from a Life Cycle Model with Idiosyncratic Income Risk. Nashville, TN: American Economic Association [publisher], 2022. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2022-03-25. https://doi.org/10.3886/E126741V1
Project Description
Summary:
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This paper argues that high marginal labor income tax rates on top earners are an effective tool for social insurance even when households have high labor supply elasticity, make dynamic savings decisions, and policies have general equilibrium effects. We construct a large scale overlapping generations model with uninsurable labor productivity risk, show that it has a realistic wealth distribution and numerically characterize the optimal top marginal rate. We find that marginal tax rates for top 1% earners of 79% are optimal as long as the model earnings and wealth distributions display a degree of concentration as observed in US data.
Scope of Project
Subject Terms:
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Progressive Taxation;
Top 1%;
Social Insurance;
Income Inequality
JEL Classification:
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E62 Fiscal Policy
H21 Taxation and Subsidies: Efficiency; Optimal Taxation
H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
E62 Fiscal Policy
H21 Taxation and Subsidies: Efficiency; Optimal Taxation
H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Data Type(s):
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program source code
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