Title:
Optimal top marginal tax rates under income splitting for couples
Author(s):
Bach, Stefan; Corneo, Giacomo; Steiner, Viktor
Year of publication:
2011
Available Date:
2011-12-14T14:10:25.550Z
Abstract:
This paper provides formulas for optimal top marginal tax rates when couples
are taxed according to income splitting between spouses, consumption is taxed,
and the skill distribution is unbounded. Optimal top marginal income tax rates
are computed for Germany using a dataset that includes the tax returns of all
German top taxpayers. We find that the optimal top marginal tax rate converges
to about 2/3 and convergence obtains at income levels that are substantially
higher than those currently subject to the actual top tax rate.
Keywords:
Optimal income taxation
Top incomes
German income tax
DDC-Classification:
336 Öffentliche Finanzen
Department/institution:
Wirtschaftswissenschaft
Volkswirtschaftslehre
Series/Multivolume:
Diskussionsbeiträge des Fachbereichs Wirtschaftswissenschaft der Freien Universität Berlin
Series/Multivolume Number:
2011,21 : Economics