Dear all, We kindly invite you to our next ECON Theory and Policy Seminar talk on Thursday, March 2, 2023 from 5:00 – 6:30 pm (Seminarroom DB04 yellow, Freihaus Building, yellow area, 4th floor) Taxation of Top Incomes and Tax Avoidance Almuth Scholl<https://www.google.com/url?q=https%3A%2F%2Fwww.wiwi.uni-konstanz.de%2Fscholl%2Fteam%2Fprof-dr-almuth-scholl%2F&sa=D&ust=1677323880000000&usg=AOvVaw3emWLcJRTmEL14Hi_5rIi1> (Universität Konstanz) https://www.wiwi.uni-konstanz.de/scholl/team/prof-dr-almuth-scholl/ This paper studies the aggregate and distributional effects of raising the top marginal income tax rate in the presence of tax avoidance. To this end, we develop a quantitative macroeconomic model with heterogeneous agents and occupational choice in which entrepreneurs can avoid taxes in two ways. On the extensive margin, entrepreneurs can choose the legal form of their business organization to reduce their tax burden. On the intensive margin, entrepreneurs can shift their income between different tax bases. In a quantitative application to the US economy, we find that tax avoidance lowers productive efficiency, generates sizable welfare losses, and reduces the effectiveness of the top marginal tax rate at lowering inequality. Tax avoidance reduces the optimal top marginal income tax rate from 47% to 43%. Further events: https://www.econ.tuwien.ac.at/index.html#events Best regards, Julia Hutter for Alexia Fürnkranz-Prskawetz Julia Hutter TU Wien Institute of Statistics and Mathematical Methods in Economics Economics E105-3 Phone: +43-1-58801x10531 E-Mail: julia.hutter@tuwien.ac.at<mailto:julia.hutter@tuwien.ac.at>