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Quantifying the Laffer Curve on the Continued Activity Tax in a Dynastic Framework

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Academic year: 2021

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Figure 1: Life cycle model Y E O W ERA R ERA π M1−πEE1− π EEπYYπYY1− π OO π OO1− W ERA+1RERA+1 π M1−πM1−1−πM R MRA π MπM
Table 1: Intergenerational change in ability Son’s Ability ( t + 1) Father’s Ability ( t ) H M LH0.4077 a0.3187 0.2736 M 0.2191 0.3507 0.4302 L 0.0929 0.1952 0.7119 a: A H-ability worker faces a 40.77% probability of giving birth to a H-ability son
Table 4: Mortality risk at 60
Figure 2: Replacement rates (SS Pension / Last net wage) 56 58 60 62 63 64 65 66 68 7000.10.20.30.40.50.60.7
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