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Taxing the Rich

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  • Landier, Augustin
  • Plantin, Guillaume

Abstract

Afluent households can respond to taxation with means that are not economically viable for the rest of the population, such as sophisticated tax plans and international tax arbitrage. This paper studies an economy in which an inequality-averse social planner faces agents who have access to a tax-avoidance technology with increasing returns to scale, and who can shape the risk proÖle of their income as they see fit. Scale economies in avoidance imply that optimal taxation is regressive at the top. This in turn may trigger excessive risk taking.

Suggested Citation

  • Landier, Augustin & Plantin, Guillaume, 2013. "Taxing the Rich," TSE Working Papers 13-514, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:28368
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    Cited by:

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    4. Alstadsæter, Annette & Johannesen, Niels & Le Guern Herry, Ségal & Zucman, Gabriel, 2022. "Tax evasion and tax avoidance," Journal of Public Economics, Elsevier, vol. 206(C).
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    6. Georges Casamatta, 2021. "Optimal income taxation with tax avoidance," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(3), pages 534-550, June.
    7. repec:hal:spmain:info:hdl:2441/2oaa6391f290lqkugdaeab6cq4 is not listed on IDEAS
    8. Georges Casamatta, 2023. "Optimal income taxation with tax avoidance and endogenous labor supply," Post-Print hal-04015963, HAL.

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    More about this item

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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