Incidence of a Capital Income Tax in a Growing Economy with Variable Savings Rates

摘要: The theory of economic growth has emphasized that the capital stock, unlike labour force, is not an " original factor production but represents accumulation past incomes.2 Any analysis incidence a tax on income should therefore begin by considering how affects stock capital. Although comparative static with varying can be instructive, process represented best model growth. purpose this paper to examine savings behaviour long-run profits 3 in growing economy. terms general all results are obviously relevant understanding corporate tax. With fixed owners would bear entire burden 4 and avoid some partial (such as tax) extent shift away from taxed sector untaxed without significantly reducing marginal product sector. Harberger's [4] such shown that, reasonable parameter values, US borne almost entirely quite similar stock. current shows replacing usual economy variable rates substantially alters conclusions about profits. For wide range plausible substantial fraction labour. assumption may, therefore, also yield misleading