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A note on incomplete factor taxation

Roc Armenter ()

Journal of Public Economics, 2008, vol. 92, issue 10-11, 2275-2281

Abstract: Optimal capital taxes may be positive in the steady state in Ramsey models with an incomplete set of factor taxes. I show this possibility crucially depends on how fiscal policy is constrained at date t = 0. If the government is barred from manipulating the value of initial assets, the Chamley-Judd result reappears: the optimal capital tax is always zero in the steady state.

Keywords: E62; Ramsey; equilibrium; Incomplete; Factor; Taxation (search for similar items in EconPapers)
Date: 2008
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Handle: RePEc:eee:pubeco:v:92:y:2008:i:10-11:p:2275-2281