TY  - UNPD
A1  - Kindermann, Fabian
A1  - Krueger, Dirk
T1  - High marginal tax rates on the top 1%?
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 473
N2  - In this paper we argue that very high marginal labor income tax rates are an effective tool for social insurance even when households have preferences with high labor supply elasticity, make dynamic savings decisions, and policies have general equilibrium effects. To make this point we construct a large scale Overlapping Generations Model with uninsurable labor productivity risk, show that it has a wealth distribution that matches the data well, and then use it to characterize fiscal policies that achieve a desired degree of redistribution in society. We find that marginal tax rates on the top 1% of the earnings distribution of close to 90% are optimal. We document that this result is robust to plausible variation in the labor supply elasticity and holds regardless of whether social welfare is measured at the steady state only or includes transitional generations.
T3  - CFS working paper series - 473 
KW  - Progressive Taxation
KW  - Top 1%
KW  - Social Insurance
KW  - Income Inequality
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/35105
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-351054
UR  - http://ssrn.com/abstract=2507167
IS  - October 5, 2014
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -