Events at CERGE-EI
Thursday, 2 November, 2023 | 14:00 | Macro Research Seminar
Charles Brendon (University of Cambridge) "Optimal Nonlinear Savings Taxation"
University of Cambridge, United Kingdom
Abstract: This paper analyses the design of optimal nonlinear savings taxation, in a multi-period consumption-savings economy where consumers face persistent, uninsurable shocks to their marginal utility of consumption. Its main contributions are: (a) to show that shocks of this kind generically justify positive marginal savings taxes, and (b) to characterise these taxes by reference to a limited number of sufficient statistics. This characterisation highlights the novel insights that can result from connecting ‘Mirrleesian’ and ‘sufficient statistics’ approaches to dynamic taxation. Specifically, the restrictions implicit in mechanism design analysis allow sufficient statistics approaches to remain manageable, even in highdimensional choice settings.
JEL Classification: D82, E21, E61 H21, H24, H30
Keywords: Nonlinear Taxation, Sufficient Statistics, Mirrleesian Taxation, New Dynamic Public Finance
Full Text: Optimal Nonlinear Savings Taxation
