Optimal Fiscal Policy in Overlapping Generations Models

Carlos Garriga ()

Public Finance Review, 2019, vol. 47, issue 1, 3-31

Abstract: In this article, we explore the proposition that the optimal capital income tax is zero using an overlapping generations model. We prove that for a large class of preferences, the optimal capital income tax along the transition path and in steady state is nonzero. For a version of the model calibrated to the US economy, we find that the model could justify the observed rates of capital income taxation for an empirically reasonable intertemporal utility function and a robust demographic structure.

Keywords: optimal taxation; uniform commodity taxation (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Optimal Fiscal Policy in Overlapping Generations Models (2017)
Working Paper: Optimal Fiscal Policy in Overlapping Generations Models (2001)
Working Paper: Optimal Fiscal Policy in Overlapping Generations Models (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:47:y:2019:i:1:p:3-31

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