Arbeitspapier
Capital Taxation under Political Constraints
This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough political coalition supports reform; thus, sustainable policies are those that will continue to attract enough political support in the future. We find that optimal marginal capital taxes are either progressive or U-shaped, so that savings are subsidized for the poor and/or the middle class but are taxed for the rich. U-shaped capital taxes always emerge when the salient reform threat consists of radically redistributing capital and individuals' political behavior is purely determined by economic motives.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 5098
- Classification
-
Wirtschaft
- Subject
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wealth inequality
capital taxation
coalition formation
- Event
-
Geistige Schöpfung
- (who)
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Scheuer, Florian
Wolitzky, Alexander
- Event
-
Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2014
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Scheuer, Florian
- Wolitzky, Alexander
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2014
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