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The International Spillovers of Capital Income Taxation: An Applied General Equilibrium Analysis

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Author Info
François Delorme
Lawrence H. Goulder
Philippe Thalmann ()

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Abstract

This paper sheds light on the complex macroeconomic effects initiated by capital income taxation using a dynamic applied general equilibrium model of the U.S. economy. The model considers impacts of policy changes on the allocation of resources across both industries and countries, and over time. Within the model, a given change in capital income taxation abroad affects the domestic economy through capital flows, commodity flows and tax revenue effects. Thus, the model considers the spillovers associated with changes in commodity flows in addition to the usual spillovers generated by capital movements.

The simulation results illustrate rather well that personal and corporate income taxation yield very different conclusions in terms of macroeconomic consequences and that it is important to distinguish between short- and long-run policy implications of the two types of capital income tax policies ...


L'objectif premier de ce texte vise mettre en vidence les impacts macroconomiques complexes rsultant de l'imposition des revenus du capital. Pour ce faire, l'analyse fait appel un modle d'quilibre gnral appliqu de type dynamique construit pour les Etats-Unis. Ce modle permet d'analyser les effets d'un changement de politique sur l'allocation des ressources au niveau industriel de mme qu'au niveau international. Les proprits dynamiques du modle permettent galement de tracer le processus d'ajustement temporel de ces effets. Ainsi, un changement donn dans l'imposition des revenus du capital l'tranger affectera l'conomie domestique par le biais des flux de capitaux et de marchandises de mme que par l'intermdiaire des revenus d'imposition. Le modle permet donc d'analyser les effets de contagion associs aux flux de marchandises en plus des habituels effets de contagion engendrs par les mouvements de capitaux.

Les rsultats des simulations montrent que les ...

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Paper provided by OECD Economics Department in its series OECD Economics Department Working Papers with number 127.

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Date of creation: Apr 1993
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Handle: RePEc:oec:ecoaaa:127-en

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