Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70928
Authors: 
Edenhofer, Ottmar
Mattauch, Linus
Siegmeier, Jan
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4144
Abstract: 
Imperfect altruism between generations may lead to insufficient capital accumulation. We study the welfare consequences of taxing the rent on a fixed production factor, such as land, in this setting. We prove that taxing the rent is welfare-enhancing as it increases capital investment. This holds for any tax level and any recycling of the tax revenues except for combinations of high taxes and strongly redistributive recycling. Specific forms of redistribution of the land rent tax - a capital subsidy or a transfer directed at fundless newborns - allow to reproduce the social optimum under parameter restrictions valid for most economies.
Subjects: 
land rent tax
overlapping generations
revenue recycling
social optimum
underaccumulation
JEL: 
H21
H22
H23
Q24
Document Type: 
Working Paper

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