The Demand for Status and Optimal Capital Taxation

Fanghui Li and Gaowang Wang

MPRA Paper from University Library of Munich, Germany

Abstract: The paper examines the famous Chamley-Judd zero capital tax theorem in model economies where agents care about their social status. We show that the limiting capital income tax is not zero in general and its sign depends only on the utility specifications. Our conclusion is robust to several important extensions: the model with multiple physical capitals, the model with both human and physical capitals, and the one with heterogeneous agents.

Keywords: Demand for Status; Capital Income Tax; Human Capital; Heterogeneous Agents (search for similar items in EconPapers)
JEL-codes: H21 H24 (search for similar items in EconPapers)
Date: 2019-09-18
New Economics Papers: this item is included in nep-pbe, nep-pub and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/96076/1/MPRA_paper_96076.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/96127/1/MPRA_paper_96127.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/96246/1/MPRA_paper_96246.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96076

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