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http://hdl.handle.net/2445/196172| Title: | Taxation of Top Incomes and Tax Avoidance |
| Author: | Di Nola, Alessandro Kocharakov, Georgi Scholl, Almuth Tkhir, Anna-Mariia Wang, Haomin |
| Keywords: | Distribució de la renda Delictes contra la seguretat social Impostos Income distribution Crimes against the social security Taxation |
| Issue Date: | 2023 |
| Publisher: | Universitat de Barcelona. Facultat d'Economia i Empresa “DP17970 Taxation of Top Incomes and Tax Avoidance”, CEPR Press Discussion Paper No. 17970. https://cepr.org/publications/dp17970 |
| Series/Report no: | [WP E-Eco23/443] |
| Abstract: | “DP17970 Taxation of Top Incomes and Tax Avoidance”, CEPR Press Discussion Paper No. 17970. https://cepr.org/publications/dp17970 This paper studies the aggregate and distributional effects of raising the top marginal income tax rate in the presence of tax avoidance. To this end, we develop a quantitative macroeconomic model with heterogeneous agents and occupational choice in which entrepreneurs can avoid taxes in two ways. On the extensive margin, entrepreneurs can choose the legal form of their business organization to reduce their tax burden. On the intensive margin, entrepreneurs can shift their income between different tax bases. In a quantitative application to the US economy, we find that tax avoidance lowers productive efficiency, generates sizable welfare losses, and reduces the effectiveness of the top marginal tax rate at lowering inequality. Tax avoidance reduces the optimal top marginal income tax rate from 47% to 43%. |
| It is part of: | UB Economics – Working Papers, 2023, E23/443 |
| URI: | http://hdl.handle.net/2445/196172 |
| Appears in Collections: | UB Economics – Working Papers [ERE] |
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| File | Description | Size | Format | |
|---|---|---|---|---|
| E23-443_DiNola et al.pdf | 761.13 kB | Adobe PDF | View/Open |
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