Against the backdrop of increased international mobility of individuals, this paper addresses a central tax challenge in this context: the taxation of capital gains. Because capital gains taxation is generally realization-based, taxpayer mobility prior to realization can erode countries’ taxing rights. In response, both the academic literature and policymakers have considered the use of exit taxes on accrued, unrealized gains. Drawing on economic approaches to formula apportionment and tax averaging, as well as legal concepts from tax and public policy, this paper develops and evaluates a novel framework for capital gains taxation: Cross-Border Capital Gains Taxation (CBCGT). The model harmonizes capital gains taxation through cross-border realization-based averaging and intertemporal apportionment. Thereby it balances competing principles of realization-based taxation and accrual-based allocation. The proposal aims to improve international tax policy, and to this end, the paper conducts a legal analysis of its potential application, using the EU as a case study.

Depending on the planner’s desire for under or over-accumulation of savings and

therefore redistribution in a heterogeneous agent economy, the tax that maximizes welfare can well be at the allowed maximum in Greulich et al. (2023). At this upper bound, associated Lagrangian multiplier γ can take either sign which ensures that no feasible optimal allocation is ruled out. Indeed, at the steady state γ turns out to be negative and we arrive at more equal societies. Importantly, the “two elements” that they claim are the driving forces behind their result, then play no role. Further, as a support to our claim, we show that considering all possible solutions in Greulich et al. (2023) leads to an identical optimal tax outcomes as in, for example, Benhabib and Sz˝oke (2021) and Straub and Werning (2020).

Deployment subsidies for nascent technologies have moved to the forefront of climate action, industrial policy, and geoeconomics. To limit the substantial fiscal costs of such programs, policymakers routinely employ subsidy schedules that are nonlinear in the quantity agents deploy. However, nonlinearities can threaten a program's deployment goals because agents may respond to them at the intensive margin by reducing deployed quantity and at the extensive margin by ceasing participation. This paper characterizes optimal nonlinear subsidy schemes in which a principal trades off the benefits from deployment with its budgetary costs. Theoretically, it shows that nonlinearities are optimal only if adopters' participation responses are heterogeneous along the subsidy schedule. Yet, early-stage technologies typically exhibit limited heterogeneity in this dimension. As a consequence, the optimal subsidy rate is close to constant over a wide range of the schedule. A quantitative analysis of the canonical German rooftop-solar program demonstrates the theoretical findings.

This paper estimates the effects of taxes on mining exploration and production and derives revenue-maximizing tax rates. Using a comprehensive panel of firms' worldwide extraction and exploration expenses, I show that the response to taxation operates almost entirely at the extensive margin through a reduction in exploration expenses. I establish these results by exploiting both global tax variations and the four largest worldwide tax increases in the sector. To identify causal effects, I rely on event studies comparing both affected to non-affected firms and subsidiaries within affected firms. Based on my results, I then characterize the revenue-maximizing sales-based royalty and income tax rates. I find that the revenue-maximizing tax rates exceed currently observed rates, suggesting that mining countries could increase tax revenues from extractive activities.