Joseph Steinberg, University of Toronto

Wealth inequality has prompted calls for higher taxes on capital income and wealth, but also concerns that rich households would evade these taxes by concealing their assets offshore. We develop a general equilibrium model of offshore tax evasion and use it to quantify the consequences of taxing capital more heavily. We find that raising capital income taxes would reduce tax revenue, taxing wealth would reduce welfare, and both policies would increase wealth inequality. In the absence of evasion, however, raising capital income taxes could increase tax revenue substantially, taxing wealth would be optimal, and both policies could reduce inequality.

DATE: Friday, December 3, 2021 

TIME: 3:30-5:00 p.m.

LOCATION: Fronczak 444