- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
In this article, we explore the proposition that the optimal capital income tax is zero using an overlapping generations model. We prove that for a large class of preferences, the optimal capital income tax along the transition path and in steady state is nonzero. For a version of the model calibrated to the US economy, we find that the model could justify the observed rates of capital income taxation for an empirically reasonable intertemporal utility function and a robust demographic structure.
This article explores the proposition that the optimal capital income tax is zero. In contrast with previous studies, we consider an overlapping generations version of the neoclassical growth model to analyze the optimal fiscal policy along the transition path to a long-run steady state. In this context, we provide sufficient conditions for the zero capital income tax result, and we show that it is very difficult to obtain zero optimal capital taxes if the government cannot condition taxes on age. When the government cannot condition taxes on age, the additional constraints that this restriction imposes in the set of tax instruments play an important role in the determination of the optimal policy. However, we find that the uniform commodity tax result is a sufficient condition to ensure zero optimal capital taxes if either the government can condition taxes on age or generations live two periods and the old does not supply labor.
For a version of the model calibrated to the US economy, we find that the model could justify the observed rates of capital income taxation for some plausible choice of parameters and functional forms. These results answer Judd’s (1999) suggestion that further work is needed to see the robustness of the optimality of zero capital income taxes in overlapping generations models with realistic demographic specifications and empirically reasonable intertemporal utility functions. The general result shows that intergenerational heterogeneity can alter the basic results and generate a nonzero capital income tax either in the transition path or in the long run.