This paper analyses the effects of cuts in the marginal tax rates on income from labour and capital on the macroeconomy and on the intergenerational distribution of welfare in a small open economy. For this purpose we et up a computable general equilibrium model incorporating overlapping...

The paper develops a model of endogenous economic growth, where sustainable growth is driven by private capital accumulation and productive government spending on education and pollution abatement. The economy is distorted by pollution externalities in production and consumption; by taxes and...

This paper investigates aspects of capital income tax policy in a world economy with many symmetric countries, where production is subject to country-specific productivity shocks. Each country can levy both withholding taxes on income accruing to foreigners and dividend taxes on domestic...

In recent years the Nordic countries have introduced a so-called dual income tax which combines a proportional tax on capital income with progressive taxation of labour income. The paper argues that this asymmetric treatment of the two types of income can be defended on pure efficiency grounds,...

This paper establishes in the simplest possible way optimal rules for capital income and profits taxation in the open economy with or without foreign ownership of doemstic firms. We show that if there are constraints on the feasibility of profits taxation, both saving and investment taxes...