This paper studies the effects of agent heterogeneity on optimal capital income tax rates.
In a two period model with arbitrarily many heterogeneous agents, we explicitly derive the
welfare effects of taxation depending on the distribution of the agents' characteristics. In
particular, we show that the sign of the optimal capital income tax rate depends not on the
extent of inequality in goods endowments and productivities each by itself, but on a measure
of inequality in their joint distribution.
Dieser Eintrag ist Teil der Universitätsbibliographie.
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