Taxation of Top Incomes and Tax Avoidance

dc.contributor.authorDi Nola, Alessandro
dc.contributor.authorKocharkov, Georgi
dc.contributor.authorScholl, Almuth
dc.contributor.authorTkhir, Anna-Mariia
dc.contributor.authorWang, Haomin
dc.date.accessioned2023-11-10T11:24:14Z
dc.date.available2023-11-10T11:24:14Z
dc.date.issued2023
dc.description.abstractThis paper studies the aggregate and distributional effects of raising the top marginal income tax rate in the presence of tax avoidance. To this end, we develop a quantitative macroeconomic model with heterogeneous agents and occupational choice in which entrepreneurs can avoid taxes in two ways. On the extensive margin, entrepreneurs can choose the legal form of their business organization to reduce their tax burden. On the intensive margin, entrepreneurs can shift their income between different tax bases. In a quantitative application to the US economy, we find that tax avoidance lowers productive efficiency, generates sizable welfare losses, and reduces the effectiveness of the top marginal tax rate at lowering inequality. Tax avoidance reduces the optimal top marginal income tax rate from 47 % to 43 %.
dc.description.versionpublisheddeu
dc.identifier.urihttps://kops.uni-konstanz.de/handle/123456789/68137
dc.language.isoeng
dc.relation.ispartofseriesCEPR Discussion Paper
dc.subject.ddc330
dc.titleTaxation of Top Incomes and Tax Avoidanceeng
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@techreport{DiNola2023Taxat-68137,
  series={CEPR Discussion Paper},
  title={Taxation of Top Incomes and Tax Avoidance},
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  year={2023},
  number={17970},
  author={Di Nola, Alessandro and Kocharkov, Georgi and Scholl, Almuth and Tkhir, Anna-Mariia and Wang, Haomin}
}
kops.citation.iso690DI NOLA, Alessandro, Georgi KOCHARKOV, Almuth SCHOLL, Anna-Mariia TKHIR, Haomin WANG, 2023. Taxation of Top Incomes and Tax Avoidancedeu
kops.citation.iso690DI NOLA, Alessandro, Georgi KOCHARKOV, Almuth SCHOLL, Anna-Mariia TKHIR, Haomin WANG, 2023. Taxation of Top Incomes and Tax Avoidanceeng
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