Taxação de Grandes Fortunas: O Que Diz a Literaura?

This report conceptually evaluates the merits of wealth taxation. To do so, it breaks the question into two parts. First, does it make sense to create intertemporal distortions, i.e., wedges between the marginal rates of intertemporal substitution and transformation? Second, if the answer is yes, does it make a difference to tax wealth or capital income? For the first question, the report focuses on the debate surrounding the Chamley-Judd zero-capital-tax result, as revisited by Straub and Werning (2020). This section begins by offering an intuition for the zero tax on capital income result and shows why it fails under the conditions raised by Straub and Werning. Finally, the connection between these conditions, commitment, and consistency is explored in the reply by Barro and Chari. The second central issue concerns the difference between wealth taxation and capital income taxation in the presence of heterogeneous rates of return and imperfect capital markets. A literature review covering the most recent applied contributions by Florian Scheuer
and Joel Slemrod, in addition to the theoretical connection with the Atkinson-Stiglitz result, is provided to explain the limitations of classical theory and the behavioral effects of taxing the very rich. Regarding recent discussions, in addition to the cases mentioned in the previous section, the proposal in Brazil to tax this group is also highlighted.