Optimal Taxation of Capital Income in Economies with Identical Private and Social Discount Rates

Authors

Christophe Chamley

Document Type

Discussion Paper

Publication Date

4-1-1984

CFDP Number

699

CFDP Pages

33

Abstract

The optimal capital income tax is analyzed in the framework of intertemporal efficient taxation. The relation between the zero tax in the long-run and the equality between private and social discount rates is emphasized. The properties of the dynamic second best path described for a specific example (convergence to a steady state and values of the capital income tax in the transition). The case where wealth is a specific utility argument is also considered.

Recommended Citation

Chamley, Christophe, "Optimal Taxation of Capital Income in Economies with Identical Private and Social Discount Rates" (1984). Cowles Foundation Discussion Papers. 932.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/932