Rossi, R. "Taxing Consumption in Unequal Economies" | WEBINAR

Thursday, October 19, 2023

Title: "Taxing Consumption in Unequal Economies"

Speaker: Professor Raffaele Rossi, University of Birmingham

Host: Assistant Professor Kospentaris Ioannis, Department of Economics, Athens University of Economics and Business

Time: 15.30 -17.00

WEBINAR

Attachments:  PDF of Relevant Paper

Abstact: This paper shows that linear consumption taxes are a powerful tool to implement efficient redistribution. We derive this result in a quantitative life-cycle economy that reproduces the distribution of income and wealth in the United States. Optimal policy calls for raising all fiscal revenues from consumption, and providing redistribution via a highly progressive wage tax schedule. Capital income and wealth should not be taxed. This policy reduces inequality and increases productivity, and brings large welfare gains relative to the status-quo. Around two-thirds of these gains are due to redistribution. Finally, our reform is also welfare improving in the short-run.