How to Protect Future Generations Using Tax Base Restrictions

33 Pages Posted: 15 Sep 2002 Last revised: 31 Jan 2021

See all articles by Antonio Rangel

Antonio Rangel

California Institute of Technology

Multiple version iconThere are 2 versions of this paper

Date Written: September 2002

Abstract

This paper studies constitutional restrictions on the tax base that protect future generations from expropriation and improve the optimality of investment in Intergenerational Public Goods (IPGs). The choice of the tax base matters because it affects how intergenerational (IG) spillovers are capitalized into assets that are owned by current generations, and thus the IG politics. We show that with an income tax base, present generations expropriate future generations and produce inefficiently low levels of IPGs. By contrast, with a land tax base, IG expropriation using debt is impossible, the level of investment in IPGs is higher and, for some types of IPGs, Pareto optimal.

Suggested Citation

Rangel, Antonio, How to Protect Future Generations Using Tax Base Restrictions (September 2002). NBER Working Paper No. w9179, Available at SSRN: https://ssrn.com/abstract=330318

Antonio Rangel (Contact Author)

California Institute of Technology ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
20
Abstract Views
969
PlumX Metrics