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Author: Weinzierl, Matthew C.
Resulting in 2 citations.
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Gelber, Alexander Weinzierl, Matthew C. |
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Equalizing Outcomes and Equalizing Opportunities: Optimal Taxation when Children's Abilities Depend on Parents' Resources Working Paper 13-014, Harvard Business School, Harvard University, April 2014 Cohort(s): Children of the NLSY79, NLSY79 Publisher: Harvard Business School Keyword(s): Achievement; Armed Forces Qualifications Test (AFQT); Children, Academic Development; Earned Income Tax Credit (EITC); Family Income; Family Resources; Intergenerational Patterns/Transmission; Peabody Individual Achievement Test (PIAT- Math); Peabody Individual Achievement Test (PIAT- Reading); Taxes Permission to reprint the abstract has not been received from the publisher. Empirical research suggests that parents' economic resources affect their children's future earnings abilities. Optimal tax policy therefore treats future ability distributions as endogenous to current taxes. We model this endogeneity, calibrate the model to match estimates of the intergenerational transmission of earnings ability in the United States, and use the model to simulate such an optimal policy numerically. The optimal policy in this context is more redistributive toward low-income parents than existing U.S. tax policy. It also increases the probability that low-income children move up the economic ladder, generating a present-value welfare gain of one and three-quarters percent of consumption in our baseline case. |
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Bibliography Citation
Gelber, Alexander and Matthew C. Weinzierl. "Equalizing Outcomes and Equalizing Opportunities: Optimal Taxation when Children's Abilities Depend on Parents' Resources." Working Paper 13-014, Harvard Business School, Harvard University, April 2014. |
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Golosov, Michael Troshkin, Maxim Tsyvinski, Aleh Weinzierl, Matthew C. |
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Preference Heterogeneity and Optimal Capital Income Taxation Working Paper No. 16619. National Bureau of Economic Research, December 2010. Also: www.nber.org/papers/w16619.pdf Cohort(s): NLSY79 Publisher: National Bureau of Economic Research (NBER) Keyword(s): Armed Forces Qualifications Test (AFQT); Cognitive Ability; Earnings; Modeling; Skilled Workers; Taxes We examine a prominent justification for capital income taxation: goods preferred by those with high ability ought to be taxed. In an environment where commodity taxes are allowed to be nonlinear functions of income and consumption, we derive an analytical expression that reveals the forces determining optimal commodity taxation. We then calibrate the model to evidence on the relationship between skills and preferences and extensively examine the quantitative case for taxes on future consumption (saving). In our baseline case of a unit intertemporal elasticity, optimal capital income tax rates are 2% on average and 4.5% on high earners. We find that the intertemporal elasticity of substitution has a substantial effect on optimal capital taxation. If the intertemporal elasticity is one-third, optimal capital income tax rates rise to 15% on average and 23% on high earners; if the intertemporal elasticity is two, optimal rates fall to 0.6% on average and 1.6% on high earners. Nevertheless, in all cases that we consider the welfare gains of using optimal capital taxes are small. |
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Bibliography Citation
Golosov, Michael, Maxim Troshkin, Aleh Tsyvinski and Matthew C. Weinzierl. "Preference Heterogeneity and Optimal Capital Income Taxation." Working Paper No. 16619. National Bureau of Economic Research, December 2010. |