
Macroeconomics and Trade seminar series | Wealth Taxation and Life Expectancy by Andrés Bellefatto
Invites you to a
Macroeconomics and Trade seminar presented by
(University of Queensland)
Wealth Taxation and Life Expectancy
Wednesday 29 March 2023
2:00pm – 3.30pm
Zoom: 853 7109 0316
Abstract: I study the optimal taxation of wealth in a dynastic Mirrlees economy featuring lifespan risk. Working individuals are heterogeneous across labor productivity, which is privately observed and correlates with survival probability. I derive novel formulas linking taxes on savings and bequests to the degree of annuity market imperfections at the optimum. Due to longevity differences, optimal policies involve subsidies on bequests which increase with the annuity load factor. This result revisits the conventional view whereby imperfect annuitization creates a motive for taxing bequests heavily. When calibrating the model using U.S. data, I find that the forces of differential longevity on optimal wealth taxes are substantial, and may lead to significant welfare gains.
For further information contact: Macroeconomics and Trade seminar series coordinator Dr James Graham (james.a.graham@sydney.edu.au)
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