Redistributive capital taxation revisited by Özlem Kina, Ctirad Slavík and Hakki Yazici
By: Kina, Özlem
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Contributor(s): Slavík, Ctirad | Yazici, Hakki.
Material type: 
ArticleSubject(s): CAPITAL | IMPUESTOS | REDISTRIBUCION | MODELOS ECONOMETRICOS
In:
American Economic Journal : Macroeconomics v. 16, n. 2, April 2024, p. 182-216Summary: This paper uses a rich quantitative model with endogenous skill acquisition to show that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 67 percent, while it is 61 percent in an identically calibrated model without capital-skill complementarity. The skill premium falls from 1.9 to 1.84 along the transition following the optimal reform in the capital-skill complementarity model, implying substantial indirect redistribution from skilled to unskilled workers. These results show that a redistributive government should take into account capital-skill complementarity when taxing capital.
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Resumen.
Bibliografía.
This paper uses a rich quantitative model with endogenous skill acquisition to show that capital-skill complementarity provides a quantitatively significant rationale to tax capital for redistributive governments. The optimal capital income tax rate is 67 percent, while it is 61 percent in an identically calibrated model without capital-skill complementarity. The skill premium falls from 1.9 to 1.84 along the transition following the optimal reform in the capital-skill complementarity model, implying substantial indirect redistribution from skilled to unskilled workers. These results show that a redistributive government should take into account capital-skill complementarity when taxing capital.
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