Optimal Taxation in a Simple Model of Human Capital Accumulation

Claudia Hermeling () and Martin Barbie ()
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Claudia Hermeling: University of Karlsruhe
Martin Barbie: University of Karlsruhe

Economics Bulletin, 2006, vol. 5, issue 5, 1-8

Abstract: This paper studies optimal taxation in dynamic economies with a simple form of human capital accumulation as considered in Bull (1993). We show that in a Ramsey equilibrium along any balanced growth path, the taxes on wage income and (physical) capital income must be zero. Under the assumption on preferences of Bull (1993), we extend his result by showing that along a balanced growth all optimal taxes are necessarily zero.

JEL-codes: E6 H2 (search for similar items in EconPapers)
Date: 2006-02-21
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Citations: View citations in EconPapers (2)

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