Optimal Nonlinear Savings Taxation

This paper analyses the design of optimal nonlinear savings taxation, in a multi-period consumption savings economy where consumers face persistent, uninsurable shocks to the marginal value that they place on consuming. 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.

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