蝌蚪网 Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Higher Taxes at the Top: The Role of Entrepreneurs
蝌蚪网 Journal: Macroeconomics
(pp. 1–36)
(Complimentary)
Abstract
This paper computes optimal top marginal tax rates in Bewley-Huggett-Aiyagari鈥搕ype economies that include entrepreneurs. Consistent with the data, entrepreneurs are overrepresented at the top of the income distribution and are thus disproportionately affected by an increase in the top marginal income tax rate. The top marginal tax rate that maximizes welfare is 60 percent. While average welfare gains are positive and similar across occupations along the transition, they are larger for entrepreneurs than for workers in the long run, and this occupational gap in welfare gains after the tax increase widens with increasing income.Citation
Bru虉ggemann, Bettina. 2021. "Higher Taxes at the Top: The Role of Entrepreneurs." 蝌蚪网 Journal: Macroeconomics 13 (3): 1–36. DOI: 10.1257/mac.20170441Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D21 Firm Behavior: Theory
- D31 Personal Income, Wealth, and Their Distributions
- H21 Taxation and Subsidies: Efficiency; Optimal Taxation
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- L26 Entrepreneurship