Optimal Taxation of Human and Physical Capital in Endogenous Capital Models / Nouriel Roubini, Gian Maria Milesi-Ferrett.

Format:

Book

Author/Creator:

Roubini, Nouriel.

Contributor:

National Bureau of Economic Research.

Milesi-Ferretti, Gian Maria.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4882.

NBER working paper series no. w4882

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1994.

Summary:

This paper studies the effects of human and physical capital income taxation on growth, and examines how these effects depend on the technologies for human capital accumulation and 'leisure'. It then derives the normative implications of the analysis for the optimal taxation of factor incomes. It is shown that in general both capital and labor (human capital) taxes are growth-reducing. In these cases, the optimal long-run tax on both capital and labor income is zero. The optimal taxation plan consists of taxing both factors in the short run, and financing spending in the long run through accumulated budget surpluses.

Notes:

Print version record

October 1994.