Tax Policy, Investments in Human and Physical Capital, and Productivity
This paper analyzes the implications of tax policy for the accumulation of human and physical capital and for the overall productivity level of the economy. A comprehensive income tax, applying to both labour income and capital income. discriminates against investments in human capital relative to investments in physical capital. Hence. it has an adverse impact on human capital accumulation. Taking into account a positive external effect of investments in human capital on overall productivity, the adverse effect of income taxation on human capital investments is significantly magnified.
|Date of creation:||Dec 1990|
|Publication status:||published as "Comprehensive Income Taxation, Investments in Human Capital, and Productivity." Journal of Public Economics 50, pp. 397-406 (1993).|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
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