Do Capital Income Taxes Hinder Growth?
7 Pages Posted: 22 Feb 2013 Last revised: 10 Mar 2013
Date Written: February 22, 2013
One of the main arguments against raising capital income tax rates is that doing so discourages savings and investment and hinders economic growth. However, academic research on taxes and growth suggests that this argument has no real basis. And the primary alternatives to capital income taxation — labor income taxes and increased government borrowing — carry their own potentially adverse effects on growth.
Keywords: capital income taxation, labor income taxation, taxation and savings, taxation and investment
JEL Classification: H20, H24, H29, K34, D91, O4
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