Optimal taxation and borrowing constraints

Nathalie Mathieu-Bolh ()

Economía, 2011, vol. 36, issue 31, 9-53

Abstract: I propose a new overlapping generations model, in which individuals face different income levels, life expectancies and borrowing constraints to study Ramsey optimal taxation. Contrary to previous contributions, I find that optimal capital income taxation generally differs from zero in the long term even when preferences are additively separable. I also find that the tax system should generally incorporate a progressive capital income tax in the long run. Furthermore, the model enables to disentangle the respective roles of finite life horizons, productivity differences and borrowing limits.

Keywords: Optimal taxation; borrowing constraints; overlapping generations. (search for similar items in EconPapers)
JEL-codes: E62 H21 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
ftp://iies.faces.ula.ve/Pdf/Revista31/Rev31Mathieu.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ula:econom:v:36:y:2011:i:31:p:9-53

Access Statistics for this article

Economía is currently edited by Dyanna María Ruíz Uzcátegui and Yibeli Emilia Briceño Carrero

More articles in Economía from Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela Facultad de Ciencias Económicas y Sociales. Instituto de Investigaciones Económicas y Sociales. Campus Universitario Liria, Edificio G, Tercer Nivel. Mérida 5101, Estado Mérida, Venezuela. Contact information at EDIRC.
Bibliographic data for series maintained by Alexis Vásquez ().