Savings and Taxation
AbstractIn section 1.2 we shall examine the optimal taxation of capital and labor incomes in a simple growth model and derive formulae for the optimal tax rates. These are used in section 1.3 to evaluate claims that abolishing capital income taxes would lead to large welfare gains. Inflation is introduced in section 1.4, and alternative approaches to modeling savings behavior are discussed in section 1.5. Finally, we shall look briefly at some of the empirical evidence on the effects of taxes on savings. Our analysis will be highly simplified. We shall ignore many of the issues stressed by the Meade Committee, such as the complex interaction between personal and corporate taxation, the sheer diversity of tax rates currently imposed on different forms of saving, and the portfolio aspects of personal saving. The relationship between expenditure on durables and saving and the effect of social security on consumption will also be left to one side, and we shall say little about the production side of the economy. (For surveys of the effects of taxes on investment, see Helliwell, 1976; King, 1977; and von Furstenberg and Malkiel, 1977.) Despite these omissions the model captures the essential features necessary to an evaluation of the efficiency arguments.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0428.
Date of creation: Jan 1980
Date of revision:
Publication status: published as King, Mervyn A. "Saving and Taxation." Public Policy and the Tax System, edited by G.A. Hughes And G.M. Heal, pp. 1-35. London: George Allen & Unwin, 1980.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Boadway, Robin, 2005. "Income tax reform for a globalized world: The case for a dual income tax," Journal of Asian Economics, Elsevier, vol. 16(6), pages 910-927, December.
- Seidman, Laurence S. & Lewis, Kenneth A., 1998. "Conversion to a Consumption Tax in a Growth Model with Heterogeneity," Journal of Macroeconomics, Elsevier, vol. 20(4), pages 665-680, October.
- Lansing, Kevin J., 1999.
"Optimal redistributive capital taxation in a neoclassical growth model,"
Journal of Public Economics,
Elsevier, vol. 73(3), pages 423-453, September.
- Kevin J. Lansing, 1998. "Optimal redistributive capital taxation in a neoclassical growth model," Working Papers in Applied Economic Theory 99-01, Federal Reserve Bank of San Francisco.
- Charles E. McLure, Jr., 1980. "Taxes, Saving, and Welfare: Theory and Evidence," NBER Working Papers 0504, National Bureau of Economic Research, Inc.
- Bovenberg, A.L. & Jacobs, B., 2001.
"Redistribution and Education Subsidies are Siamese Twins,"
2001-82, Tilburg University, Center for Economic Research.
- Lans Bovenberg, A. & Jacobs, Bas, 2005. "Redistribution and education subsidies are Siamese twins," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2005-2035, December.
- A. Lans Bovenberg & Bas Jacobs, 2005. "Redistribution and Education Subsidies are Siamese Twins," Tinbergen Institute Discussion Papers 05-036/3, Tinbergen Institute.
- Bovenberg, A Lans & Jacobs, Bas, 2001. "Redistribution and Education Subsidies are Siamese Twins," CEPR Discussion Papers 3099, C.E.P.R. Discussion Papers.
- Fischer Black, 1981. "When Is a Positive Income Tax Optimal?," NBER Working Papers 0631, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.