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Preferences over Capital Income versus Labor Income Taxation

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  • Mahieu, Géraldine

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; Belgian National Fund for Scientific Research (FNRS))

  • Rottier, Stéphane

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

Empirical papers show that labor income and capital income are differently taxed all over the world. We investigate whether this may correspond to individual preferences. We tackle this question in an overlapping generations general equilibrium model with heterogeneous agents: young versus old and low skilled versus high skilled individuals. Taxes finance unemployment benefits and government consumption. High skilled agents prefer capital income taxes, while young unskilled and old agents prefer labor income taxation.

Suggested Citation

  • Mahieu, Géraldine & Rottier, Stéphane, 2000. "Preferences over Capital Income versus Labor Income Taxation," LIDAM Discussion Papers IRES 2000021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2000021
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2000-21.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Income taxation; Majority voting;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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