The welfare loss from a capital income tax
Abstract: A decomposition of the welfare loss from a capital income tax into its two components: the intertemporal (consuming today versus tomorrow) and the within-period or static (consuming durable versus nondurable goods). Its calculations, which use a calibrated life-cycle model with a representative consumer, suggest that ignoring the static distortion may lead to substantial underestimation of the total welfare loss.
File(s): File format is text/html http://www.clevelandfed.org/research/review/1997/97-q1-cai.pdf
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Review
Publication Date: 1997
Issue: Q I