Do Capital Income Taxes Hinder Growth?

7 Pages Posted: 22 Feb 2013 Last revised: 10 Mar 2013

Chris William Sanchirico

University of Pennsylvania Law School; University of Pennsylvania Wharton School - Business Economics and Public Policy Department

Date Written: February 22, 2013

Abstract

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

Suggested Citation

Sanchirico, Chris William, Do Capital Income Taxes Hinder Growth? (February 22, 2013). U of Penn, Inst for Law & Econ Research Paper No. 13-6. Available at SSRN: https://ssrn.com/abstract=2222843 or http://dx.doi.org/10.2139/ssrn.2222843

Chris William Sanchirico (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-4220 (Phone)

HOME PAGE: http://www.law.upenn.edu/faculty/csanchir/

University of Pennsylvania Wharton School - Business Economics and Public Policy Department

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

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