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Redistributive capital taxation revisited
- 1.0585328 - NHU-C 2025 RIV US eng J - Journal Article
Kina, Ö. - Slavík, Ctirad - Yazici, H.
Redistributive capital taxation revisited.
American Economic Journal: Macroeconomics. Roč. 16, č. 2 (2024), s. 182-216. ISSN 1945-7707. E-ISSN 1945-7715
R&D Projects: GA ČR(CZ) GA17-27676S
Institutional support: Cooperatio-COOP
Keywords : capital taxation * capital-skill complementarity * inequality
OECD category: Applied Economics, Econometrics
Impact factor: 6.3, year: 2023
Method of publishing: Limited access
https://doi.org/10.1257/mac.20200395
This paper uses a rich quantitative model with endogenous skill acquisition to show that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 67 percent, while it is 61 percent in an identically calibrated model without capital-skill complementarity. The skill premium falls from 1.9 to 1.84 along the transition following the optimal reform in the capital-skill complementarity model, implying substantial indirect redistribution from skilled to unskilled workers. These results show that a redistributive government should take into account capital-skill complementarity when taxing capital.
Permanent Link: https://hdl.handle.net/11104/0353037
Research data: OPENICPSR
Number of the records: 1