A growth oriented dual income tax

This file is part of IDEAS, which uses RePEc data

A growth oriented dual income tax

Author Info

Christian Keuschnigg ()
Martin Dietz ()

Additional information is available for the following registered author(s):

Abstract

This paper proposes a growth oriented dual income tax by combining an allowance for corporate equity with a broadly defined flat tax on personal capital income. Revenue losses are compensated by an increase in the value added tax. The paper demonstrates the neutrality properties of the reform with respect to investment, firm financial decisions and organizational choice. Tax rates are chosen to prevent income shifting from labor to capital income. The reform decisively strengthens investment of domestically owned firms as well as home and foreign based multinationals and boosts savings. Simulations with a calibrated growth model for Switzerland indicate that the reform could add between 4 to 5 percent of GNP in the long-run, depending on the specific scenario. Given the slow nature of capital accumulation, it imposes considerable costs in the short-run. We consider a tax smoothing scenario to offset the intergenerationally redistributive effects. Copyright Springer Science + Business Media, LLC 2007

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 14 (2007)
Issue (Month): 2 (April)
Pages: 191-221
Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Handle: RePEc:kap:itaxpf:v:14:y:2007:i:2:p:191-221

Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=102915

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Other versions of this item:

Paper
- Christian Keuschnigg & Martin D. Dietz, 2005. "A Growth Oriented Dual Income Tax," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Roger Gordon, 1998. "Can High Personal Tax Rates Encourage Entrepreneurial Activity?," IMF Staff Papers, Palgrave Macmillan Journals, vol. 45(1), pages 2. [Downloadable!] (restricted)

Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Christian Keuschnigg, 2006. "Extensive and Intensive Investment and the Dead Weight Loss of Corporate Taxation," University of St. Gallen Department of Economics working paper series 2006 2006-16, Department of Economics, University of St. Gallen. [Downloadable!]
Peter Birch Sørensen, 2005. "Dual Income Taxation: Why and How?," EPRU Working Paper Series 05-10, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
Keuschnigg, Christian, 2006. "Exports, Foreign Direct Investment and the Costs of Coporate Taxation," CEPR Discussion Papers 5769, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- Christian Keuschnigg, 2007. "Exports, Foreign Direct Investment and the Costs of Corporate Taxation," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
- Christian Keuschnigg, 2007. "Exports, Foreign Direct Investment and the Costs of Corporate Taxation," Working Papers 0708, Oxford University Centre for Business Taxation. [Downloadable!]
- Christian Keuschnigg, . "Exports, Foreign Direct Investment and the Costs of Corporate Taxation," FIW Working Paper series 005, FIW. [Downloadable!]
- Christian Keuschnigg, 2006. "Exports, Foreign Direct Investment and the Costs of Corporate Taxation," University of St. Gallen Department of Economics working paper series 2006 2006-17, Department of Economics, University of St. Gallen. [Downloadable!]
- Christian Keuschnigg, 2008. "Exports, foreign direct investment, and the costs of corporate taxation," International Tax and Public Finance, Springer, vol. 15(4), pages 460-477, August. [Downloadable!] (restricted)
Henrekson, Magnus & Sanandaji, Tino, 2008. "Taxing Entrepreneurial Income," Working Paper Series 732, Research Institute of Industrial Economics. [Downloadable!]
Doina Maria Radulescu & Michael Stimmelmayr, 2006. "ACE vs. CBIT: Which is Better for Investment and Welfare?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
Peter Birch Sørensen, 2005. "Dual Income Taxation: Why and how?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
Seppo Kari & Vesa Kanniainen & Jouko Ylä-Liedenpohja, 2007. "Nordic Dual Income Taxation of Entrepreneurs," VATT Discussion Papers 415, Government Institute for Economic Research (VATT). [Downloadable!]
Other versions:
- Vesa Kanniainen & Seppo Kari & Jouko Ylä-Liedenpohja, 2005. "Nordic Dual Income Taxation of Entrepreneurs," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
- Vesa Kanniainen & Seppo Kari & Jouko Ylä-Liedenpohja, 2007. "Nordic dual income taxation of entrepreneurs," International Tax and Public Finance, Springer, vol. 14(4), pages 407-426, August. [Downloadable!] (restricted)
John W. Diamond & George R. Zodrow, 2007. "Economic Effects of A Personal Capital Income Tax Add-on to a Consumption Tax," International Studies Program Working Paper Series, at AYSPS, GSU paper0715, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
Bernd Genser & Andreas Reutter, 2007. "Moving Towards Dual Income Taxation in Europe," International Studies Program Working Paper Series, at AYSPS, GSU paper0717, International Studies Program, Andrew Young School of Policy Studies, Georgia State University. [Downloadable!]
Other versions:
- Bernd Genser & Andreas Reutter, 2007. "Moving Towards Dual Income Taxation in Europe," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(3), pages 436-456, September. [Downloadable!] (restricted)
Seppo Kari & Hanna Karikallio, 2007. "Tax Treatment of Dividends and Capital Gains and the Dividend Decision Under Dual Income Tax," VATT Discussion Papers 416, Government Institute for Economic Research (VATT). [Downloadable!]
Other versions:
- Seppo Kari & Hanna Karikallio, 2007. "Tax treatment of dividends and capital gains and the dividend decision under dual income tax," International Tax and Public Finance, Springer, vol. 14(4), pages 427-456, August. [Downloadable!] (restricted)

Statistics

Access and download statistics

Did you know? IDEAS indexes over 600000 items of research in Economics alone.

This page was last updated on 2008-7-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.