Capital taxation during the U.S. Great Depression
AbstractPrevious studies of the U.S. Great Depression find that increased taxation contributed little to either the dramatic downturn or the slow recovery. These studies include only one type of capital taxation: a business profits tax. The contribution is much greater when the analysis includes other types of capital taxes. A general equilibrium model extended to include taxes on dividends, property, capital stock, and excess and undistributed profits predicts patterns of output, investment, and hours worked more like those in the 1930s than found in earlier studies. The greatest effects come from the increased tax on corporate dividends.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Staff Report with number 451.
Date of creation: 2010
Date of revision:
Other versions of this item:
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-01-16 (Accounting & Auditing)
- NEP-ALL-2011-01-16 (All new papers)
- NEP-DGE-2011-01-16 (Dynamic General Equilibrium)
- NEP-HIS-2011-01-16 (Business, Economic & Financial History)
- NEP-MAC-2011-01-16 (Macroeconomics)
- NEP-PBE-2011-01-16 (Public Economics)
- NEP-PUB-2011-01-16 (Public Finance)
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