We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a dynamic … equilibrium model with capital-skill complementarity. Such a tax reform leads to expansionary long-run aggregate effects, but is … distortionary labor or consumption tax rates have to increase to finance the capital tax rate cut. An extension to a model with …

economy model of tax determination, I study the effect of voters with a group-based social conscience, so they care more about … fractionalization and group antagonism reduce the support for redistribution. Whereas within group inequality increases support for … redistribution, inequality between groups have the opposite effect. All these results hold even if a poor group is in majority. Using …