The Design of Capital Income Taxation: Reflections on the Mirrlees Review
AbstractThis commentary reflects on the recommendations of the Mirrlees Review on tax reform with a special focus on capital income taxation. Regarding the alternatives of moving to a consumption based tax system, the commentary discusses the relative merits of choosing an ACE system (allowance for corporate equity) rather than a cash-flow tax on the company level. It reviews the arguments in favour of full elimination of tax on the normal return to savings at the personal level which contrasts with alternative tax reform proposals recommending a positive but low and flat tax rate on personal capital income. It also discusses how existing computational models would have to be extended for a meaningful quantification of the gains and costs of implementing a tax reform along the lines of the Mirrlees Review.
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Bibliographic InfoPaper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1129.
Length: 19 pages
Date of creation: Jul 2011
Date of revision:
Fundamental tax reform; consumption based tax system;
Other versions of this item:
- Christian Keuschnigg, 2011. "The Design of Capital Income Taxation: Reflections on the Mirrlees Review," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 32(3), pages 437-452, 09.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-07-21 (Accounting & Auditing)
- NEP-ALL-2011-07-21 (All new papers)
- NEP-PUB-2011-07-21 (Public Finance)
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