The spirit of capitalism and optimal capital taxation

Fanghui Li (), Gaowang Wang and Heng-Fu Zou ()
Additional contact information
Fanghui Li: Center for Economic Research, Shandong University

No 614, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: The paper reexamines the famous Chamley-Judd zero capital tax theorem in model economies where the agents are endowed with the spirit of capitalism. It is shown that the limiting capital income tax is not zero in general and depends on the utility speciffications rather than the production technology. The similar formulas of optimal capital taxes are derived in more general settings with multiple physical capitals or heterogeneous agents (capitalists and workers).

Pages: 14 pages
Date: 2020
New Economics Papers: this item is included in nep-dge, nep-pbe, nep-pub and nep-upt
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Citations: View citations in EconPapers (1)

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Journal Article: The spirit of capitalism and optimal capital taxation (2020)
Working Paper: The spirit of capitalism and optimal capital taxation (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:614

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