The Asset Price Approach to the Analysis of Capital Income Taxation
This paper summarizes my recent research directed at the development of an asset price approach to the analysis of capital income taxation. While asset prices play a crucial role in many macroeconomic models, they have been subordinate in most previous efforts to study the effects of capital income taxation on economic behavior. A number of reasons for focusing on the role of asset prices in analyzing public finance questions are discussed. These include the role of asset prices in determining investment decisions, and the fact that changes in asset prices are indicators of the horizontal and vertical equity effects of tax reforms. Recent empirical research in which asset price information is studied in order to measure the effects on economic behavior of tax reforms and to distinguish between alternative models of the effects of capital income taxation is reviewed. Directions for future research in public finance, focusing on asset markets, are also discussed.
|Date of creation:||May 1984|
|Date of revision:|
|Publication status:||published as Summers, Lawrence H. "The Asset Price Approach to the Analysis of Capital Income Taxation," Issues in Contemporary Macroeconomics and Distribution, ed. George R. Felwil, pp. 429-443. London: Macmillan, 1985.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Poterba, James M. & Summers, Lawrence H., 1983.
"Dividend taxes, corporate investment, and `Q',"
Journal of Public Economics,
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- Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
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