How Should Capital be Taxed?

Reprint No. 2020:68

Author(s): Spencer Bastani and Daniel WaldenströmYear: 2020 Title: Journal of Economic Surveys Volume (No.): 34 (4) Pages: 812–846
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How Should Capital be Taxed? Spencer Bastani and Daniel Waldenström

This survey discusses how capital should be taxed in advanced economies. We review the theoretical optimal tax literature, survey empirical studies on the distribution of capital and the distortionary costs of capital taxation, and analyze the desirability of specific taxes on capital income, wealth, property, inheritances, and corporate profits. Our overall conclusion is that capital taxation plays an important role in an optimal tax system, but only certain ways of taxing capital are able to strike a balance between optimality and administrative feasibility.

Bastani, Spencer and Daniel Waldenström (2020), "How Should Capital be Taxed?". Journal of Economic Surveys 34(4), 812–846.

Daniel Waldenström


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Spencer Bastani


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Interdisciplinary European Studies

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