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Full-Text Articles in Social and Behavioral Sciences
Optimal Bequests Taxation In The Steady State, Georges Casamatta
Optimal Bequests Taxation In The Steady State, Georges Casamatta
Georges Casamatta
We consider an infinite-horizon economy populated by two types of individuals, some individuals being more productive than others. Individuals live one period and are altruistic toward their children. We first determine the second-best steady state allocation and then study the optimal bequest and labor income tax functions. We consider independent income and bequests tax functions. We firrst show that the second-best is not implementable with such tax schedules. We then exhibit a condition under which high bequests should be taxed (and low bequests subsidized). A numerical example suggests that this condition is likely to be met when individuals are sufficiently …
Optimal Taxation With Joint Production Of Agriculture And Rural Amenities, Georges Casamatta, Gordon Rausser, Leo Simon
Optimal Taxation With Joint Production Of Agriculture And Rural Amenities, Georges Casamatta, Gordon Rausser, Leo Simon
Georges Casamatta
We show that, when there is joint production of an agricultural good and rural amenities, the first-best allocation of resources can be implemented with a tax on the agricultural good and some subsidies on the production factors (land and labor). The use of a subsidy on the agricultural good can only be explained by the desire of the policymaker to redistribute income from the consumers to the farmers.
Tax Avoidance And The Design Of The Tax Structure, Georges Casamatta
Tax Avoidance And The Design Of The Tax Structure, Georges Casamatta
Georges Casamatta
We study the optimal mix of direct and indirect taxes in the presence of tax avoidance. It is shown that a linear consumption tax is part of the optimal tax scheme, and so even when the assumptions of the Atkinson-Stiglitz theorem are not satisfied. The reason is that taxing consumption is a way to tax true income, whereas income taxation only falls on reported income. We also show that, with a weakly separable utility function and linear Engel curves, tax rates should be uniform across goods. With nonlinear Engel curves, which good should be taxed more depends on the comparison …
Choosing The Legal Retirement Age In Presence Of Unemployment, Georges Casamatta, Caroline De Paoli
Choosing The Legal Retirement Age In Presence Of Unemployment, Georges Casamatta, Caroline De Paoli
Georges Casamatta
A general conclusion of the theoretical literature on pensions is, confronted to an increased longevity, to encourage continued activity. This literature however assumes a perfect labour market. The central question addressed in this article is whether it is still desirable to increase the retirement age when individuals face the risk of being unemployed. In this purpose, we study the design of the Pay-As-You-Go pension system, focusing on the determination of the retirement age, in a model where people differ according to age only and face in every period a given probability of becoming unemployed. We first determine the optimal pension …
Optimal Income Taxation With Tax Avoidance, Georges Casamatta
Optimal Income Taxation With Tax Avoidance, Georges Casamatta
Georges Casamatta
We follow the approach of Grochulski (2007), who determines the optimal income tax schedule when individuals have the possibility of avoiding paying taxes. We however modify his setup by considering a convex concealment cost function. This assumption violates the subadditivity property used in Grochulski (2007) and this has strong implications for the design of the tax schedule. This latter indeed shows that, with subadditivity, all individuals should declare their true income. Tax avoidance is thus not optimal. With a convex cost function, we find that a subset of individuals, located in the interior of the income distribution, should be allowed …