Mark Huggett is a Full Professor in the Economics Department of Georgetown University. Dr. Huggett’s research focuses on macroeconomics, inequality, social insurance, and computational methods. He began his tenure with Georgetown in 1999, though he did pause temporarily in 2006 to serve as a Visiting Professor of Finance in the Wharton School of the University of Pennsylvania. Prior to Georgetown, he taught economics at the University of Illinois. Dr. Huggett earned his undergraduate degree from the University of Wisconsin, and his Ph.D. from the University of Minnesota.
Dr. Huggett will be discussing the taxation of the highest earners in the United States. Specifically, he will compare two schools of thought related to the identification of the revenue maximizing marginal tax rate for top earners. The “established view”, advanced by Diamond, Saez, and others, holds that the revenue maximizing rate is roughly 73 percent. This rate is substantially above the top rate of 42.5 percent in 2010. Critics of the “established view”, like Badel and Dr. Huggett, argue that excessive taxation at the top end is likely to have implications for future generations. That is, the high rates of taxation will deter future top earners from pursuing the same level of investment in human capital development. Therefore, the optimal rate is actually much lower than 73 percent. Dr. Huggett will present the theoretical underpinnings of both views, as well as supporting empirical evidence.