This paper examines the future of capital income taxation in a world of capital mobility. It first explores the motivation for personal and corporate income taxation in an open economy and argues that policymakers should view these taxes as having quite different impacts on the economy. The...

"The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about...