Political Economics of Capital Income Taxation

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Political Economics of Capital Income Taxation

• Assaf Razin, Efraim Sadka, and Phillip Swagel

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Equilibrium with an Exogenous Capital Income Tax
Innate ability parameter
CDF of the innate ability parameter
Cutoff level of e
Cash grant paid in period t
Cash grant paid in period t1
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Life-time income
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Political-economy determination of the capital
income tax
By assumption
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Three equations in three unknowns
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The Dependency Ratio and the Capital Income Tax
Share of old in population