Tsai, Yi-Chan; Yang, C. C.; Yu, Hsin-Jung - In: Quantitative economics : QE ; journal of the … 13 (2022) 3, pp. 1061-1099
of whether the Ramsey (1927) or the Mirrlees (1971) approach is adopted. First, a tax on capital equipment corrects the … “pecuniary externalities” caused by ESTP. The correction prescribes a downward or an upward adjustment of tax rates over time … prescribe an increasing marginal tax rate on labor income over time. Interestingly, we find that the prescribed pattern of …