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Taxation of Investment and Savings in a World Economy

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  • Gordon, Roger H

Abstract

The equilibrium of capital and equilibrium market prices are derived for a world economy with a unified securities market, mobile capital, no uncertainty, and varying tax rates on different sources of income in each country. The paper then characterizes optimal tax rates for a small country in this setting, focusing on the peculiar incentives created when the before-tax rate of return differs among securities due to differences in their typical tax treatment. Copyright 1986 by American Economic Association.

Suggested Citation

  • Gordon, Roger H, 1986. "Taxation of Investment and Savings in a World Economy," American Economic Review, American Economic Association, vol. 76(5), pages 1086-1102, December.
  • Handle: RePEc:aea:aecrev:v:76:y:1986:i:5:p:1086-1102
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