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Why is mobile capital taxed?

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  • Kangoh Lee

Abstract

The government for a jurisdiction has both capital and labor taxes at its disposal. It taxes mobile capital to finance the public good despite the desire to attract capital and despite the tax on immobile labor if capital incomes are distributed more unequally than labor incomes among the residents of the jurisdiction. The result extends to progressive taxes and to pure redistribution. Copyright Springer-Verlag 2012

Suggested Citation

  • Kangoh Lee, 2012. "Why is mobile capital taxed?," Journal of Economics, Springer, vol. 107(2), pages 157-181, October.
    • Handle: RePEc:kap:jeczfn:v:107:y:2012:i:2:p:157-181
    DOI: 10.1007/s00712-011-0257-1
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    Cited by:

    1. Timothy P. Hubbard & Justin Svec, 2015. "A Model of Tradeable Capital Tax Permits," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 916-942, December.
    2. Timothy P. Hubbard & Justin Svec, 2012. "A Model of Tradeable Capital Tax Permits," Working Papers 1202, College of the Holy Cross, Department of Economics.
    3. Kangoh Lee, 2021. "Labor market frictions, capital, taxes and employment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1329-1359, December.

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    More about this item

    Keywords

    Mobile capital; Capital tax; Labor tax; H71; H72; H73;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects

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