Comment on: “Income Inequality and Asset Prices under Redistributive Taxation” by Lˇuboš Pástor and Pietro Veronesi

•Selection effects: entrepreneurs are more skilled and less risk averse than pensioners.•Taxes affect choice of becoming an entrepreneur or a pensioner.•Higher taxes reduce aggregate output but increase productivity.•Empirically negative relationship between entrepreneurial activity and tax burden.•Possible extensions: add workers or social planner that sets optimal tax schedule.