Recent empirical evidence finds that progressive taxation is an effective economic stabilizer, but theoretical results disagree. This paper shows that a lifecycle model with total factor productivity shocks can match the empirical evidence. If the US economy switched from progressive to proportional taxation, output volatility would increase by 5 percent. Progressive taxes act as stabilizers by reducing income volatility among the young and soon‐to‐be retirees. Thus, incorporating a rich lifecycle structure in the model is important to match the data. The model is then used to study the welfare implications of reducing tax progressivity.

中文翻译：

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累进税收与经济稳定*

最近的经验证据表明，累进税制是一种有效的经济稳定剂，但理论结果却不一致。本文表明，具有全要素生产率冲击的生命周期模型可以匹配经验证据。如果美国经济从累进税制改为比例税制，产出波动将增加5％。累进税通过减少年轻人和即将退休的退休人员的收入波动来起到稳定作用。因此，在模型中纳入丰富的生命周期结构对于匹配数据很重要。然后，该模型用于研究降低税收累进性的福利含义。