The Steady-State Effects of Income Taxation with Endogenous Time Preference

Wen-Ya Chang, Hsueh-Fang Tsai and Ching-chong Lai
Additional contact information
Wen-Ya Chang: Fu-Jen Catholic University, Taiwan
Hsueh-Fang Tsai: Fu-Jen Catholic University, Taiwan

Public Finance Review, 1999, vol. 27, issue 6, 648-664

Abstract: This article studies the steady-state effects of income taxation on output by incorporating endogenous time preference into the neoclassical growth framework. It is found that a rise in the income tax may lead to a boom in economic activities in the long run. This result contrasts with a general conclusion of neoclassical growth models that a surcharge in the income tax will depress output. Furthermore, the scenario that the government transforms the tax revenues into the productive government expenditure is discussed. The authors find that the effect of public infrastructure expenditure on the marginal productivity of private capital may reinforce or diminish the results in the endogenous time preference case.

Date: 1999
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/109114219902700605 (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:27:y:1999:i:6:p:648-664

DOI: 10.1177/109114219902700605

Access Statistics for this article

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