Rent Taxation in a Small Open Economy ; The Effect on Transitional Generations

Koethenbuerger, Marko; Poutvaara, Panu (2007): Rent Taxation in a Small Open Economy ; The Effect on Transitional Generations. Discussion Paper / Centre for Economic Policy Research (CEPR), 2007,08

Abstract

We show that taxation of rents may yield an intergenerational Pareto-improvement in a small open economy provided tax revenues are earmarked to reduce wage taxes. Previous literature has shown that rent taxation benefits current young and future generations, while we show that it also benefits the current old generation when the initially prevailing tax mix is sufficiently skewed towards wage taxation. Rent Taxes, Capitalization, Transitional Dynamics, Labor Supply, Asset Prices.

• Item Type: Paper (Discussion Paper)
• Faculties: Economics; Economics > Chairs > CESifo-Professorship for International Institutional Comparisons
• Subjects: 300 Social sciences > 330 Economics
• Language: English