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A progressive capital income tax - a bad idea, or just a useless idea? Lessons for Bulgaria (1999-2018)

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  • Vasilev, Aleksandar

Abstract

Progressive capital taxation is introduced into a real-business-cycle (RBC) model with fiscal policy. The artificial economy is calibrated to Bulgarian data for the period 1999-2018. The quantitative role of progressive taxation on capital income is investigated for the stabilization of cyclical fluctuations in Bulgaria. Unfortunately, the quantitative effect of the presence of such a tax turned out to be very small, and thus not important for either business cycle stabilization, or public finance issues.

Suggested Citation

  • Vasilev, Aleksandar, 2020. "A progressive capital income tax - a bad idea, or just a useless idea? Lessons for Bulgaria (1999-2018)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 2(4), pages 402-411.
    • Handle: RePEc:zbw:espost:228522
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    File URL: https://www.econstor.eu/bitstream/10419/228522/1/NAR_accepted_dec2020.pdf
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    References listed on IDEAS

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    1. Spencer Bastani & Daniel Waldenström, 2020. "How Should Capital Be Taxed?," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 812-846, September.
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    Keywords

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    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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