Is Foreign-Owned Capital a Bad Thing to Tax?
Social and Economic Dimensions of an Aging Population Research Papers from McMaster University
The aging population has raised at least two concerns about tax policy. First, taxes will need to be increased to cover higher public-pension and medical-care expenses when baby boomers have retired. Second, taxes can be cut in the meantime, as the government realizes the "fiscal dividend" that accompanies its debt reduction program (that has been motivated by the aging population development). This paper uses a simple endogenous growth analysis to examine these issues. It is assumed that sales tax increases are infeasible on political grounds. Two conclusions emerge: the income tax rate levied on domestic residents should be cut during the debt-reduction period, and the tax rate on foreigners whose capital is operating in Canada should be increased later on when the bulk of the baby boomers have retired.
Keywords: fiscal policy; endogenous growth; open economy (search for similar items in EconPapers)
JEL-codes: E10 E60 F43 H30 O40 (search for similar items in EconPapers)
Pages: 25 pages
New Economics Papers: this item is included in nep-acc and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcm:sedapp:214
Access Statistics for this paper
More papers in Social and Economic Dimensions of an Aging Population Research Papers from McMaster University Contact information at EDIRC.
Bibliographic data for series maintained by ().