Redistributive capital taxation revisited

0585329 - NHÚ 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 MŠMT(CZ) LX22NPO5101
Institutional support: RVO:67985998
Keywords : capital taxation * capital-skill complementarity * inequality
OECD category: Applied Economics, Econometrics
Impact factor: 6, year: 2022
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/11104/0353038