Do Capital Income Taxes Hinder Growth?
Chris William Sanchirico
University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department
February 22, 2013
U of Penn, Inst for Law & Econ Research Paper No. 13-6
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.
Number of Pages in PDF File: 7
Keywords: capital income taxation, labor income taxation, taxation and savings, taxation and investment
JEL Classification: H20, H24, H29, K34, D91, O4
Date posted: February 22, 2013 ; Last revised: March 10, 2013