Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/92771 
Authors: 
Year of Publication: 
2003
Series/Report no.: 
ISER Discussion Paper No. 595
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
This paper analyzes optimal nonlinear income and inheritance taxation by incorporating two types of models that were developed independently in the public finance literature: an infinite horizon representative agent model such as Judd (1995), Chamley (1986) and Lucas (1992), and asymmetric information model analyzed by Mirrlees (1971) and Stiglitz (1982). In this paper, by using an infinite horizon model with heterogenous agents and quasi-linear preference under an asymmetric information environment we characterize optimal income and inheritance taxation. This paper shows that, contrary to the general perception that inheritance taxation should be progressive to some extent, the expected tax liability of those who have a higher level of assets is lower than the expected tax liability of those who have a lower level of assets. Thus, the optimal inheritance tax is regressive.
Subjects: 
capital income taxation
heterogenous agents
redistribution
inheritance taxation
Document Type: 
Working Paper

Files in This Item:
File
Size
173.15 kB





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