We study the optimal tax system in a dynamic model where differences in wages induce differences in inheritances, and the transition from parent ability to child ability is described by a Markov chain. In accordance with empirical evidence, we assume that in any generation more able individuals are likely to have a more able parent, which implies that in the steady state they also tend to recei...

Since the 1980s, the U.S. income distribution has become considerably more concentrated toward the top while the wealth distribution has not. I argue that this can be accounted for by occupational shifts caused by the decline in tax progressivity. To show this, I construct a dynamic general equilibrium model of occupational choice which distinguishes between entrepreneurs, who run their own fir...

This paper considers the scale and prevalence of valuation issues under a wealth tax. Valuation are frequently cited in literature as most difficult aspect taxes. We examine some problematic asset types from perspective. also consider range solutions to manage these concerns, drawing on international experience approaches already taken for other taxes within UK system. conclude that satisfactor...

The Statistics of Income Division (SOI) of the IRS, utilizing an estimation methodology first introduced ninety years ago in Great Britain, produces estimates of personal wealth for an important segment of the U.S. population from tax returns filed for wealthy decedents. Federal estate tax returns provide a rich source of financial and demographic data on the nation’s wealthiest individuals. Us...

Does parental wealth inequality impact next generation labor income inequality? And does a tax on affect the distribution of generation? We tackle both questions empirically using detailed intergenerational data from Norway, focusing effects wages rather than capital income. Results suggest that net NOK 1 million increases children by 14,000. Children wealthy parents also have higher mobility. ...

We study the impact of Domestic Production Activities Deduction (DPAD) on mergers and acquisitions. DPAD reduces corporate tax rates income from work or goods made in U.S. Results indicate that quantity quality acquisition bids by DPAD-advantaged firms conform to predictions neoclassical theory firm financial constraints. Specifically, bids, particularly those cash-financed, increase substantia...

This article presents the effects of alternative fiscal policies on the intertemporal government budget constraint when the time horizon of the policy maker varies. I show that the wealth effect associated with cuts in the skill-adjusted labor income tax rate improves the intertemporal budget balance, whereas the intertemporal substitution effect associated with the physical capital income tax ...