Abstract I study the optimal taxation of robots, other capital, and labor income. show that it is to distort robot adoption. The tax (or subsidy) exploits general-equilibrium effects compress wages, which reduces income-tax distortions supply, thereby raising welfare. In calibrated model, when robots are expensive, a subsidy optimal. As get cheaper, becomes them. Yet, reforming status-quo syste...

Using a two-agent model comprised of capitalists and workers, this paper examines the importance of imperfect competition in product and labour markets in determining the welfare effects of tax reform. The reform considered consists of eliminating the capital tax alongside a concurrent rise in the labour tax. In contrast to the perfectly competitive model, models with product or labour market f...

I take a new look at the long-run implications of taxation through the lens of modern Schumpeterian growth theory. I focus on the latest vintage of models that sterilize the scale effect through a process of product proliferation that fragments the aggregate market into submarkets whose size does not increase with the size of the workforce. I show that the following interventions raise welfare:...

We provide a new explanation for cross-sectional variation in dividend tax capitalization. Our analysis is twofold. First, we conduct a theoretical analysis that shows that liquidity (illiquidity) mitigates (magnifies) the positive effect of dividend taxes on expected rates of return documented in prior literature. Second, we conduct an empirical analysis centered around the Jobs and Growth Tax...

This paper studies the dynamic Ramsey taxation of foreign assets in a small open economy model with international mobility of capital. The benevolent government of the small open economy chooses taxes on factors of local production and net foreign assets to finance an exogenous stochastic stream of government expenditures. The government can fully commit to future policies and balanced budgets,...

Dynamic computable general equilibrium (CGE) models, such as the MONASH model developed at the Centre of Policy Studies, typically use complex dynamic investment mechanisms to generate dynamic growth paths. Even so, these models don’t account for corporate finance and corporate taxation in determining investment outcomes. This paper provides final results from a work program aimed at imposing c...

This paper shows that a small open economy, which suffers from involuntary unemployment, should levy a positive source-based tax on capital income. A revenue-neutral tax reform, which increases the capital tax rate and reduces the labour tax rate will induce firms to substitute labour for capital. Such a tax reform will lower marginal cost of production, increase output, reduce unemployment, an...