S-WoPEc
 
Scandinavian Working Papers in Economics
HomeAboutSeriesSubject/JEL codesAdvanced Search
Department of Economics, Uppsala University Working Paper Series, Uppsala Center for Fiscal Studies, Department of Economics, Uppsala University

No 2010:12:
The Welfare Gains of Age Related Optimal Income Taxation

Spencer Bastani (), Sören Blomquist () and Luca Micheletto ()

Abstract: Using a calibrated overlapping generations model we quantify the welfare gains of an age dependent income tax. Agents face uncertainty regarding future abilities and can by saving transfer consumption across periods. The welfare gain of switching from an age-independent to an age-dependent nonlinear tax amounts in our benchmark model to around three percent of GDP. The gains are particularly high when there are restrictions on debt policy. The gains of using a nonlinear- as opposed to a linear tax are even larger. Surprisingly, it is of secondary importance to optimally choose the tax on interest income.

Keywords: labor income taxation; capital income taxation; age-dependent taxes; OLG model; (follow links to similar papers)

JEL-Codes: H21; H23; H24; (follow links to similar papers)

48 pages, October 25, 2010

Before downloading any of the electronic versions below you should read our statement on copyright.
Download GhostScript for viewing Postscript files and the Acrobat Reader for viewing and printing pdf files.

Full text versions of the paper:

129580_wp201012.pdf    PDF-file
Download Statistics
This paper is published as:
Bastani, Spencer, Sören Blomquist and Luca Micheletto, (2013), 'The Welfare Gains of Age Related Optimal Income Taxation', International Economic Review, Vol. 54, Nov, No. 4, pages 1219-1249



Questions (including download problems) about the papers in this series should be directed to Katarina Grönvall ()
Report other problems with accessing this service to Sune Karlsson () or Helena Lundin ().

Programing by
Design by Joachim Ekebom

Handle: RePEc:hhs:uufswp:2010_012 This page was generated on 2014-12-14 19:27:53