Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25879
Authors: 
Schindler, Dirk
Year of Publication: 
2006
Series/Report no.: 
CESifo working paper 1834
Abstract: 
We show in a two-period world with endogenous savings and two assets, one of them exhibiting a stochastic return, that an interest-adjusted income tax is optimal. This tax leaves a riskless component of interest income tax free and taxes the excess return with a special tax rate. There is no trade-off between risk allocation and efficiency in intertemporal consumption. Both goals are reached. As the resulting tax system divides income into three parts, the tax can also be called a Triple Income Tax. This distinction and a special tax rate on the excess return are necessary in order to have an optimal risk-shifting effect.
JEL: 
H21
Document Type: 
Working Paper

Files in This Item:
File
Size
231.81 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.