How Should Capital Be Taxed?

35 Pages Posted: 3 Sep 2020

See all articles by Spencer Bastani

Spencer Bastani

IFAU - Institute for Labour Market Policy Evaluation; Linnaeus University - Department of Economics and Statistics; Research Institute of Industrial Economics (IFN)

Daniel Waldenström

Research Institute of Industrial Economics (IFN)

Date Written: September 1, 2020

Abstract

This survey discusses how capital should be taxed in advanced economies. We review the theoretical optimal tax literature, survey empirical studies on the distribution of capital and the distortionary costs of capital taxation, and analyze the desirability of specific taxes on capital income, wealth, property, inheritances, and corporate profits. Our overall conclusion is that capital taxation plays an important role in an optimal tax system, but only certain ways of taxing capital are able to strike a balance between optimality and administrative feasibility.

Keywords: Capital taxation, Income inequality, Inheritance tax, Optimal taxation, Property tax, Wealth inequality, Wealth tax

Suggested Citation

Bastani, Spencer and Waldenström, Daniel, How Should Capital Be Taxed? (September 1, 2020). Journal of Economic Surveys, Vol. 34, Issue 4, pp. 812-846, 2020, Available at SSRN: https://ssrn.com/abstract=3684613 or http://dx.doi.org/10.1111/joes.12380

Spencer Bastani (Contact Author)

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden

Linnaeus University - Department of Economics and Statistics ( email )

Växjö, 351 06
Sweden

Research Institute of Industrial Economics (IFN) ( email )

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

Daniel Waldenström

Research Institute of Industrial Economics (IFN) ( email )

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

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
46
PlumX Metrics