Tehran Institute for Advanced Studies (TeIAS)

/ Optimal Taxation of Wealthy Individuals __ Ali Shourideh

Talk

Optimal Taxation of Wealthy Individuals

January 05, 2019

Venue

Khatam University, Building No2.
Address: Mollasadra Blvd., North Shirazi St., East Daneshvar St., No.17. See location on Google map

+982189174612

Dr. Ali Shourideh

Assistant Professor of Economics and Frank A. and Helen E. Risch Faculty Development Professor of Business at Carnegie Mellon University

Overview

This paper studies the determinants of optimal taxes for wealthy individuals faced with capital income risk. I develop a model of optimal taxation of capital income in which wealth and income inequality is a result of capital income shocks together with frictions in financial markets. I use the model to study optimal taxation of various types of capital income: capital income from controlled businesses, outside the business as well as bequests. In presence of risk-return trade-offs, i.e., when more productive investments are riskier, I show that it is typically optimal to have progressive saving taxes. Furthermore, in study an inter-generational context, and the implications of the model on long run efficient distribution of wealth. I show that the long-run distribution of wealth has a fat-tail distribution and compare the efficient tail of the wealth distribution to the one resulting from an ad-hoc incomplete market model.

Biography

Ali Shourideh is an Assistant Professor of Economics and Frank A. and Helen E. Risch Faculty Development Professor of Business at Carnegie Mellon University, Tepper School of Business. He conducts research in the fields of macroeconomics, public finance, and contract theory. In his research, he has studied optimal taxation of various forms of income and expenditure in presence of international trade and specific knowledge about technology as well as determinants of sovereign debt and government pensions when governments have re-distributional motives. He has also studied markets with adverse selection and the role of imperfect competition and learning in such markets. Professor Shourideh received his B.S. in Mechanical Engineering from Sharif University of Technology in Tehran, Iran and his Ph.D. in Economics from University of Minnesota. Previously, he has taught in New York University and Wharton School, University of Pennsylvania.