Demographics and the Politics of Capital Taxation in a Life-Cycle Economy

Xavier Mateos-Planas ()

American Economic Review, 2010, vol. 100, issue 1, 337-63

Abstract: This article studies the effects of demographics on the mix of tax rates on labor and capital. It uses a quantitative general-equilibrium, overlapping-generations model where tax rates are voted without past commitments in every period and characterized as a Markov equilibrium. In the United States, the younger voting-age population in 1990 compared to 1965 accounts for the observed decline in the relative capital tax rate between those two years. A younger population raises the net return to capital, leads voters to increase their savings, and results in a preference for lower taxes on capital. Conversely, aging might increase capital taxation. (JEL E13, H24, H25, J11)

JEL-codes: E13 H24 H25 J11 (search for similar items in EconPapers)
Date: 2010
Note: DOI: 10.1257/aer.100.1.337
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.100.1.337 (application/pdf)
http://www.aeaweb.org/aer/data/mar2010/20031131_data.zip (application/zip)
http://www.aeaweb.org/aer/data/mar2010/20031131_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

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:aea:aecrev:v:100:y:2010:i:1:p:337-63

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().