Redistribution with unobservable bequests: A case for taxing capital income

Boadway, R.;Marchand, Maurice;Pestieau, Pierre
(2000) The Scandinavian journal of economics — Vol. 102, n° 2, p. 253-267 (2000)

Files

pdfdocument.pdf
  • Restricted Access
  • Adobe PDF
  • 367.17 KB
Request a copy

Details

Authors
  • Boadway, R.
    Author
  • Marchand, MauriceUCLouvain
    Author
  • Pestieau, PierreUCLouvain
    Author
Abstract
This paper addresses the question of the optimal taxation of labour and interest income in an overlapping generations model with two unobservable characteristics, ability and inheritance. We assume realistically that saving can only be taxed anonymously, whereas the tax on labour earnings can be individualized and made non-linear. In such a setting, we show that a withholding tax on interest income along with a non-linear tax on labour income is desirable. The role of interest income taxation is to indirectly tax inherited wealth.
Affiliations

Citations

  • APA
  • Chicago
  • FWB

Boadway, R., Marchand, M., & Pestieau, P. (2000). Redistribution with unobservable bequests: A case for taxing capital income. The Scandinavian journal of economics, 102(2), 253-267. https://doi.org/10.1111/1467-9442.00198 (Original work published 2000)