Data and Code for: Should We Tax Capital Income or Wealth?

Principal Investigator(s): View help for Principal Investigator(s) Corina Boar, New York University; Virgiliu Midrigan, New York University

Version: View help for Version V1

Name	File Type	Size	Last Modified
replication			11/08/2022 09:10:AM

Project Citation:

Boar, Corina, and Midrigan, Virgiliu. Data and Code for: Should We Tax Capital Income or Wealth? Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-05-19. https://doi.org/10.3886/E178401V1

Project Description

Summary: We study optimal capital income and wealth taxation in an economy that reproduces the importance of private businesses for output and inequality. If entrepreneurs are subject to collateral constraints, they face heterogeneous rates of return, which generate a meaningful distinction between capital income and wealth taxation. We find that taxing capital income is preferable to taxing wealth because the efficiency gains from wealth taxation are swamped by the redistributional benefits of taxing the profits of richer entrepreneurs. Consequently, the gains from taxing wealth are modest. This conclusion is robust to the planner’s preference for redistribution and allowing for non-linear taxes.

Scope of Project

Subject Terms: inequality

JEL Classification:
      E20 Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)
      E60 Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
      H20 Taxation, Subsidies, and Revenue: General

Geographic Coverage: United States

Time Period(s): 2013 – 2013 (2013)

Methodology

Data Source: Survey of Consumer Finances, 2013

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Published Versions

V1 [2023-05-19]

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DDI 2.5

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