Capital Taxation and Economic Performance

Taxation and Capital Spending

Economic Integration and Redistribuitive Taxation Economic Integration and Redistributive Taxation *

We set up a simple political economy model where economic integration raises the profitability of multinational firms. In this setting redistributive taxation may rise following economic integration, if the effects of the widened income gap dominate the higher excess burden of the tax.

Housing Taxation and Capital Accumulation

This paper studies the impact of the preferential tax treatment of housing capital in a model economy that includes the main housing tax provisions currently in place in the U.S. and a minimum downpayment requirement upon purchasing non-divisible houses. Distortions arise because the tax code makes the return on housing capital larger than that on business capital. The wedge between the two rat...

Social Capital and Economic Performance: Analytics

The earlier essay came about at Ismail Serageldin's behest. He felt it would be a worthwhile exercise if I were to connect the ideas developed in Dasgupta (1993) with those in Putnam (1993), to see if the concept of social capital has potency for an understanding of the kinds of institution that are most likely to protect and promote human well-being in poor countries. The earlier essay and the...

Optimal Indirect and Capital Taxation

We consider an environment in which agents’ skills are private information and follow arbitrary stochastic processes. We prove that it is typically Pareto optimal for an individual’s marginal benefit of investing in capital to exceed his marginal cost of doing so. This wedge is consistent with a positive tax on capital income. We also prove that it is Pareto optimal for the marginal rate of sub...