Taxes, uncertainty, and human capital

Article Abstract:

The taxation of human capital is straightforward and simple but its application is complicated because of few empirical evidences to support it. Human capital is a combination of capital investment, labor supply and final good. Significant features of human capital are its final-good properties and productivity. If human capital consumes a mean return equal to or greater than financial assets, it should be taxed. However, if human capital has a lower mean return than financial assets, it should not be taxed.

Labor Force, Education

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How should government allocate subsidies for human capital?

Article Abstract:

Public finance principles are applicable in creating a framework regarding the allocation of government subsidies for human capital. This framework includes a decreasing marginal return on human investment and a rising marginal cost of investment. Comparative analysis of the taxation of investments like employer-provided education and training, government-provided educational benefits and capital investments show solutions on the proper allocation of tax deductions and subsidies.

Finance, Tax incentives, Tax credits

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Optimal income taxation: an example with a U-shaped pattern of optimal marginal tax rates

Article Abstract:

The conditions for increasing and decreasing marginal tax rates are analyzed using the Mirrlees optimal income tax model with quasi-linear preferences. It is shown that the optimal marginal tax rate at a particular income level should depend on the labor supply elasticity of that level. Marginal tax rate increases also transfer income from highly skilled individuals to the government without affecting labor supply distortions.

Income tax

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