Rent Taxation and its Intertemporal Welfare Effects in a Small Open Economy

Marko Köthenbürger and Panu Poutvaara
Authors registered in the RePEc Author Service: Marko Koethenbuerger

No 2158, CESifo Working Paper Series from CESifo

Abstract: Previous literature concludes that replacing wage taxation by taxes on a fixed factor or its rents benefits future generations. However, the effects of such steady-state gains on the transition generations have been left open. In this paper, we show that taxation of rents may also increase utility of the current generation provided tax revenues are earmarked to reduce wage taxes. In particular, a shift in the tax mix may yield an intergenerational Pareto-improvement when the initially prevailing tax mix is sufficiently skewed towards wage taxation.

Keywords: rent taxes; capitalization; transitional dynamics; labor supply; asset prices (search for similar items in EconPapers)
JEL-codes: E62 F02 H22 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Rent taxation and its intertemporal welfare effects in a small open economy (2009)
Working Paper: Rent taxation and its intertemporal welfare effects in a small open economy (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2158

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