Gradual Reforms of Capital Income Taxation.
This paper analyzes the intertemporal allocation effects of anticipated tax rate changes, reconsidering the recommendations of the Meade Committee in a perfect foresight general equilibrium model of economic growth. It is shown that the R-base (or consumption) tax can be more distortionary than an income tax and that a revenue-neutral integration of corporate and personal taxation will lower social welfare. Moreover, it is argued that a dividend tax dominates the R-base tax because it places its distortions on the financial, rather than on the real, side of the economy. Copyright 1989 by American Economic Association.
Year of publication: |
1989
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Authors: | Howitt, Peter ; Sinn, Hans-Werner |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 79.1989, 1, p. 106-24
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Publisher: |
American Economic Association - AEA |
Saved in:
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