Capital wealth taxation as a potential remedy for excessive capital wealth inequality
In this paper, it is first shown that a simple model of inheritance and chance, neither of which involve entrepreneurial or other productive contributions on the part of the capital owner, is quite successful in predicting the empirical capital wealth distribution in the United States as indicated by data taken from the 2004 Survey of Consumer Finances. To the extent that an extremely high level of capital wealth inequality does not play an essential role in maintaining effort incentives and economic prosperity, the possibility of reducing it via taxation becomes more attractive. Estate taxation has been in existence for a long time, but model simulations suggest that while it can slow the rise of capital wealth inequality from an initial condition of perfect equality, once capital wealth inequality has reached a high level, it is ineffective in reducing this level. However, further model simulations indicate that even a relatively modest rate of annual capital wealth taxation can be highly effective toward this end.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 33 (2010)
Issue (Month): 1 (October)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348|
When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:33:y:2010:i:1:p:83-104. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.