How Should Capital Be Taxed? Theory and Evidence from Sweden

79 Pages Posted: 29 Jun 2018

See all articles by Spencer Bastani

Spencer Bastani

Linnaeus University - Department of Economics and Statistics

Daniel Waldenström

Research Institute of Industrial Economics

Multiple version iconThere are 3 versions of this paper

Date Written: May 02, 2018

Abstract

This paper presents a comprehensive analysis of the role of capital taxation in advanced economies with a focus on the Swedish experience. We synthesize the existing theoretical literature, present facts about the capital stock and its distribution, review current capital tax practices and empirical findings regarding their effects on economic activity. The paper also examines the political feasibility of capital taxation by presenting results from a unique attitude survey targeted to a large representative sample of the Swedish population. Finally, we tie together our findings and discuss their implications for tax policy.

Keywords: optimal taxation, capital taxation, wealth tax, inheritance tax, corporate tax, income equality-ty, wealth inequality, political economy, preferences for redistribution

JEL Classification: D310, F280, H210, H240

Suggested Citation

Bastani, Spencer and Waldenstrom, Daniel, How Should Capital Be Taxed? Theory and Evidence from Sweden (May 02, 2018). CESifo Working Paper Series No. 7004. Available at SSRN: https://ssrn.com/abstract=3198165

Spencer Bastani (Contact Author)

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Daniel Waldenstrom

Research Institute of Industrial Economics ( email )

P.O. Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/danielw

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