Optimal taxes on income and education could reshape intergenerational wealth distribution.
The article explores the best way to tax income, education, and inheritance in a model where parents pass resources to their children through education and money. The researchers found that it's not always best to fully deduct education expenses from taxes. The optimal education subsidy, income tax, and inheritance tax can change independently. They also discovered that when education is very important for a child's success, it's best to tax education more than inheritance.