Optimal Capital Taxation Revisited

Varadarajan Chari, Juan Pablo Nicolini and Pedro Teles

No 752, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We revisit the question of how capital should be taxed, arguing that if governments are allowed to use the kinds of tax instruments widely used in practice, for preferences that are standard in the macroeconomic literature, the optimal approach is to never distort capital accumulation. We show that the results in the literature that lead to the presumption that capital ought to be taxed for some time arise because of the initial confiscation of wealth and because the tax system is restricted.

Keywords: Capital income tax; Long run; Uniform taxation (search for similar items in EconPapers)
JEL-codes: E60 E61 E62 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2018-07-06
New Economics Papers: this item is included in nep-acc, nep-dge, nep-mac, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Optimal capital taxation revisited (2020)
Working Paper: Optimal Capital Taxation Revisited (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:752

DOI: 10.21034/wp.752

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