Add to ORKGWhy is interest income taxed so much more heavily than other forms of capital income? This differential tax treatment has generated substantial tax arbitrage, resulting in lower tax revenue, efficiency costs, and apparently net gains to rich borrowers and net losses to poor lenders, together suggesting that this tax treatment makes no sense on welfare grounds. In examining this argument more formally, this paper reveals two omitted considera-tions that can help explain the existing tax treatment. First, the forecasted increase in the market interest rate results in a redistribution from rich borrowers to poor lenders. Yet this redistribution comes at no marginal efficiency cost, starting from a situation with no distortions to portfolio cho...
This paper addresses the question of the optimal taxation of labour and interest income in an overla...
¤Any views expressed here are those of the authors and not necessarily those of the Federal Reserve ...
This paper reexamines the issue of optimal capital income taxation in an endogenous growth model wit...
Why is interest income taxed so much more heavily than other forms of capital income? This different...
We interpret the marginal welfare cost of capital income taxes as the present discounted value of co...
Overcoming Misallocations of Capital by Means of a Tax on Potential Interest Earnings Real exis...
As a tax base, 'consumption' is sometimes argued to be less fair than 'income' because the benefits ...
How does wealth taxation differ from capital income taxation? When the return on investment is equal...
The Ramsey optimal taxation theory implies that the tax rate on capital income should be zero in the...
Capital asset pricing theory assumes a no-tax, after-tax efficiency equivalence; ie., that the effic...
This paper addresses the question of the optimal taxation of labour and interest income in an overla...
This paper shows that, because of capital accumulation effects, the estate tax may increase inequali...
This article shows that the traditional mapping between tax bases and tax treatments for investment ...
This paper deals with the allocational effects and implications for efficiency of a tax system in wh...
Substantially increased wealth inequality across the developed world has prompted many philosophers,...
This paper addresses the question of the optimal taxation of labour and interest income in an overla...
¤Any views expressed here are those of the authors and not necessarily those of the Federal Reserve ...
This paper reexamines the issue of optimal capital income taxation in an endogenous growth model wit...
Why is interest income taxed so much more heavily than other forms of capital income? This different...
We interpret the marginal welfare cost of capital income taxes as the present discounted value of co...
Overcoming Misallocations of Capital by Means of a Tax on Potential Interest Earnings Real exis...
As a tax base, 'consumption' is sometimes argued to be less fair than 'income' because the benefits ...
How does wealth taxation differ from capital income taxation? When the return on investment is equal...
The Ramsey optimal taxation theory implies that the tax rate on capital income should be zero in the...
Capital asset pricing theory assumes a no-tax, after-tax efficiency equivalence; ie., that the effic...
This paper addresses the question of the optimal taxation of labour and interest income in an overla...
This paper shows that, because of capital accumulation effects, the estate tax may increase inequali...
This article shows that the traditional mapping between tax bases and tax treatments for investment ...
This paper deals with the allocational effects and implications for efficiency of a tax system in wh...
Substantially increased wealth inequality across the developed world has prompted many philosophers,...
This paper addresses the question of the optimal taxation of labour and interest income in an overla...
¤Any views expressed here are those of the authors and not necessarily those of the Federal Reserve ...
This paper reexamines the issue of optimal capital income taxation in an endogenous growth model wit...