Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/32053
Authors: 
Rehme, Günther
Year of Publication: 
2007
Series/Report no.: 
Darmstadt discussion papers in economics 188
Abstract: 
In this paper I readdress the result that capital income taxes are bad instruments for pure redistribution and should be zero in the long run. In a neoclassical growth model a capital income cum investment subsidy tax, which is not distorting accumulation, is considered to investigate if net capital income taxes used for pure redistribution are zero in a long-run optimum. I find that capital income taxes may be nonzero, depending on the political power of those who receive redistributive transfers, the distribution of pre-tax factor incomes, and the intertemporal elasticity of substitution.
Subjects: 
Growth
Redistribution
Investment Subsidies
Capital Income Taxes
JEL: 
O41
H21
D33
Document Type: 
Working Paper

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