Neutral and Equitable Taxation of Pensions as Capital Income
We derive an ex post neutral comprehensive income tax on pension schemes equivalent to a Johansson-Samuelson tax that guarantees non-discriminatory treatment of lifetime-dependent and other investments. By separately taxing contributions and benefits, our concept does not require any assumptions on the return of a pension scheme and, therefore, is of special interest for taxing public PAYGO schemes. Assuming constant tax and interest rates, the system is characterized by constant fractions of deductible contributions and taxable pensions. The tax base from neutral pension taxation considerably exceeds the one under existing legislation, e.g. in Germany or in the U.S.
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- Kiesewetter, Dirk & Niemann, Rainer, 2001.
"Beiträge und Rentenzahlungen in einer entscheidungsneutralen Einkommensteuer
[Contributions and pension payments in a decision-neutral income tax]," MPRA Paper 27324, University Library of Munich, Germany.
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- Paul A. Samuelson, 1964. "Tax Deductibility of Economic Depreciation to Insure Invariant Valuations," Journal of Political Economy, University of Chicago Press, vol. 72, pages 604.
- Homburg, Stefan, 2000. "Compulsory savings in the welfare state," Journal of Public Economics, Elsevier, vol. 77(2), pages 233-239, August.
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