Abstract
One famous result in the theory of capital income taxation is that the optimal tax is zero in equilibrium (Chamley, Econometrica 54(3):607–622, 1986; Judd, J. Public Econ. 28:59–83, 1985) . This result has been derived as an open-loop Stackelberg solution to an appropriate differential game. In this paper, we consider specific feedback solutions to three dynamic models of taxation and find that the optimal tax is generally different from zero.
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We would like to express our gratitude to the editors and to unknown referees for many constructive comments and remarks which helped us improve the quality of the paper.
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Krastanov, M., Rozenov, R. (2011). Examples in Dynamic Optimal Taxation. In: Breton, M., Szajowski, K. (eds) Advances in Dynamic Games. Annals of the International Society of Dynamic Games, vol 11. Birkhäuser Boston. https://doi.org/10.1007/978-0-8176-8089-3_25
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DOI: https://doi.org/10.1007/978-0-8176-8089-3_25
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