Quantitative Evaluations of Efficient Tax Policies for Lucas' Supply Side Models
John Laitner ()
Oxford Economic Papers, 1995, vol. 47, issue 3, 471-92
Abstract:
Robert Lucas's recent paper on supply-side economics (1990) finds a large welfare loss from taxation of interest income in the U.S. economy. The present work extends the analysis of steady-state equilibria to cover the transition paths that accompany tax reform. Calculations then show a 25 percent reduction in taxes on capital's income, instituted through a carefully designed sequence of steps, yielding a 1-1.5 percent welfare gain. The analysis also considers government debt and an investment tax credit. In addition, it reveals a potential problem with one aspect of the model's stability properties, when growth is purely endogenous. Copyright 1995 by Royal Economic Society.
Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (15)
Downloads: (external link)
http://links.jstor.org/sici?sici=0030-7653%2819950 ... 0.CO%3B2-O&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
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:oup:oxecpp:v:47:y:1995:i:3:p:471-92
Ordering information: This journal article can be ordered from
https://academic.oup.com/journals
Access Statistics for this article
Oxford Economic Papers is currently edited by James Forder and Francis J. Teal
More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().