Ok. But what drives these differential rates of return, anyway? And how much can this really approach the dream of taxing luck and inheritance rather than enterprise?:

Fatih Guvenen: Use It Or Lose It: Efficiency Gains from Wealth Taxation: "When individuals differ from each other in the rate of return they earn... capital income and wealth taxes have opposite implications for efficiency as well as for some key distributional outcomes. Under capital income taxation, entrepreneurs who are more productive... pay higher taxes. Under wealth taxation, on the other hand, entrepreneurs who have similar wealth levels pay similar taxes regardless of their productivity.... A revenue-neutral tax reform that replaces capital income tax with a wealth tax raises average welfare by about 8% in consumption-equivalent terms.... The optimal wealth tax is positive, yields larger welfare gains than the tax reform, and is preferable to optimal capital income taxes.... Wealth taxes can yield both efficiency and distributional gains...


#noted

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