Given an unequal economy, a uniform flat tax on capital & labor income is a nearly optimal mode of redistribution

The authors use a dynamic general equilibrium model with uninsurable idiosyncratic risk, and replicate the distribution of income and wealth in the United States. Increasing marginal income and wealth taxes raise welfare incrementally, but a uniform tax on capital and labor, combined with a lump-sum transfer, achieves nearly optimal levels of welfare improvement.

empirical