Article ID Journal Published Year Pages File Type
5101524 Journal of Monetary Economics 2017 27 Pages PDF
Abstract
A formula for the revenue maximizing top tax rate is derived as a function of three elasticities. The formula applies to static models and to steady states of dynamic models and is relevant for the top tax rate on any component of income. The formula is applied to several classic models. The application of the formula is also illustrated using a quantitative human capital model.
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Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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The sufficient statistic approach: Predicting the top of the Laffer curve
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