Universitat Autònoma de Barcelona
The decline of capital taxation is associated with efficiency gains.We show that, when agents are heterogeneous, equity concerns can change the policy recommendation driven by efficiency. Given the empirical evidence on the roots of heterogeneity inside each country, either in/ndeveloping or developed economies, the elimination of capital taxation would lead always to a decline in inequality and to an increase of welfare of the poorest, in a small open economy acting unilaterally. On the contrary for a closed economy, or for group of open economies following the same policy, the opposite can be the result: with the elimination of capital taxation it can hurts the poorest of each country. Therefore a low degree of capital openness can support a positive tax on capital.
The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
English
Capital taxation; Incidence; Globalization of capital markets; Policy Coordination
European Commission 649396
Barcelona Graduate School of Economics. ADEMU working paper series ;
open access
Aquest document està subjecte a una llicència d'ús Creative Commons. Es permet la reproducció total o parcial, la distribució, la comunicació pública de l'obra i la creació d'obres derivades, fins i tot amb finalitats comercials, sempre i quan es reconegui l'autoria de l'obra original.
https://creativecommons.org/licenses/by/4.0/
Working papers [2842]
