The Size of Government, Capital Accumulation, and the Tax Base

David C. L. Nellor
Additional contact information
David C. L. Nellor: International Monetary Fund

Public Finance Review, 1983, vol. 11, issue 3, 321-345

Abstract: A central tax policy concern is the role of particular tax bases in either stimulating or discouraging capital accumulation. While the consumption tax has been proposed as superior to the income tax in terms of its treatment of saving, the literature has shown that whether a consumption or income-based tax system is associated with greater capital accumulation is theoretically indeterminate. This article incorporates the role of public accumulation and changing government activities into its analysis of capital accumulation, which enables this ambiguity to be resolved. An examination of U.S. data for the 1929–1978 period suggests that had inflation adjustment of the income tax been adopted it would, contrary to the implication of several tax reform proposals, have resulted in greater accumulation than the implementation of a consumption tax.

Date: 1983
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114218301100304 (text/html)

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:sae:pubfin:v:11:y:1983:i:3:p:321-345

DOI: 10.1177/109114218301100304

Access Statistics for this article

More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().