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http://hdl.handle.net/10419/29932
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| Title: | | Capital taxation, long-run growth, and bequests  |
| Authors: | | Kunze, Lars |
| Issue Date: | | 2009 |
| Series/Report no.: | | Ruhr economic papers 113 |
| Abstract: | | It has been shown that higher capital taxes can have a growth-enhancing effect when combined with a revenue-compensating cut in wage taxes (Uhlig and Yanagawa 1996; European Economic Review 40, 1521-1540) or with an expansion in productivity-increasing public services (Rivas 2003; European Economic Review 47, 477-503). The present paper demonstrates that these results critically hinge on the existence of a bequest motive. It is shown that a wage-tax cut is no longer growth-enhancing when bequests are operative. By way of contrast, increasing productive public services may well boost growth. The theoretical findings are illustrated by numerical simulations based on US data. |
| Subjects: | | Capital income taxation public spending overlapping generations growth family altruism |
| JEL: | | D64 D91 H24 H50 O40 |
| ISBN: | | 978-3-86788-126-5 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des RWI Ruhr Economic Papers, RWI
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