IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v10y1982i3p283-303.html
   My bibliography  Save this article

Is Income From Capital Subject To Individual Income Taxation?

Author

Listed:
  • Eugeive Steuerle

    (U.S. Department of the Treasury)

Abstract

Although real capital income from certain sources may be subject to tax at very high rates in an inflationary economy, this article suggests that individuals avoid individual income taxation on most capital income by saving in tax- preferred assets, and by not realizing or not reporting capital income. It is found that the average marginal rate of federal individual income tax on all capital income is about 9%. Additionally, the net amount of income from capital reported on individual returns is less than one-third of net income from capital (excluding inflationary returns) in the economy. For nominal capital income, both the inclusion rate and the average marginal rate are much lower.

Suggested Citation

  • Eugeive Steuerle, 1982. "Is Income From Capital Subject To Individual Income Taxation?," Public Finance Review, , vol. 10(3), pages 283-303, July.
    • Handle: RePEc:sae:pubfin:v:10:y:1982:i:3:p:283-303
    DOI: 10.1177/109114218201000301
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/109114218201000301
    Download Restriction: no
    File URL: https://libkey.io/10.1177/109114218201000301?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    2. Martin Feldstein & Lawrence Summers, 1983. "Inflation and the Taxation of Capital Income in the Corporate Sector," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 116-152, National Bureau of Economic Research, Inc.
    3. Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
    4. Miller, Merton H, 1977. "Debt and Taxes," Journal of Finance, American Finance Association, vol. 32(2), pages 261-275, May.
    5. Peter M. Mieszkowski, 1967. "On the Theory of Tax Incidence," Journal of Political Economy, University of Chicago Press, vol. 75(3), pages 250-250.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. James Tobin, 1987. "Inventories, Investment, Inflation and Taxes," Cowles Foundation Discussion Papers 849, Cowles Foundation for Research in Economics, Yale University.
    2. Eugene Steuerle, 1984. "Realized Income and Wealth for Owners of Closely Held Farms and Businesses: A Comparison," Public Finance Review, , vol. 12(4), pages 407-424, October.
    3. Harvey Galper & Eric Toder, 1984. "Transfer Elements in the Taxation of Income from Capital," NBER Chapters, in: Economic Transfers in the United States, pages 87-138, National Bureau of Economic Research, Inc.
    4. David F. Bradford, 1981. "Issues in the Design of Saving and Investment Incentives," NBER Working Papers 0637, National Bureau of Economic Research, Inc.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Don Fullerton & Roger H. Gordon, 1983. "A Reexamination of Tax Distortions in General Equilibrium Models," NBER Chapters, in: Behavioral Simulation Methods in Tax Policy Analysis, pages 369-426, National Bureau of Economic Research, Inc.
    2. Roger H. Gordon, 1981. "Taxation of Corporate Capital Income: Tax Revenues vs. Tax Distortions," NBER Working Papers 0687, National Bureau of Economic Research, Inc.
    3. Rapanos, Vassilis T., 1995. "The effects of environmental taxes on income distribution," European Journal of Political Economy, Elsevier, vol. 11(3), pages 487-501, September.
    4. Jeremy I. Bulow & Myron S. Scholes, 1983. "Who Owns the Assets in a Defined-Benefit Pension Plan?," NBER Chapters, in: Financial Aspects of the United States Pension System, pages 17-36, National Bureau of Economic Research, Inc.
    5. Bruno Théret & Didier Uri, 1988. "La courbe de Laffer dix ans après : un essai de bilan critique," Revue Économique, Programme National Persée, vol. 39(4), pages 753-808.
    6. Alan J. Auerbach, 1986. "The Economic Effects of the Corporate Income Tax: Changing Revenues and Changing Views," NBER Chapters, in: Financing Corporate Capital Formation, pages 107-122, National Bureau of Economic Research, Inc.
    7. Bhatia, Kul B, 1998. "Tax Incidence with Three Goods and Two Primary Factors: Theory and Applications," Public Finance = Finances publiques, , vol. 53(2), pages 123-144.
    8. Karney, Daniel H., 2016. "General equilibrium models with Morishima elasticities of substitution in production," Economic Modelling, Elsevier, vol. 53(C), pages 266-277.
    9. Schönemann, Kristin, 2009. "Finanzierungsstrategien und ihre Auswirkungen auf den Unternehmenswert deutscher Immobilien-Kapitalgesellschaften," arqus Discussion Papers in Quantitative Tax Research 94, arqus - Arbeitskreis Quantitative Steuerlehre.
    10. Don Fullerton, 1983. "Which Effective Tax Rate?," NBER Working Papers 1123, National Bureau of Economic Research, Inc.
    11. William M. Gentry & R. Glenn Hubbard, 1998. "Fundamental Tax Reform and Corporate Financial Policy," NBER Working Papers 6433, National Bureau of Economic Research, Inc.
    12. Altig, David & Carlstrom, Charles T, 1991. "Inflation, Personal Taxes, and Real Output: A Dynamic Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(3), pages 547-571, August.
    13. Graham, John R., 1999. "Do personal taxes affect corporate financing decisions?," Journal of Public Economics, Elsevier, vol. 73(2), pages 147-185, August.
    14. Magdalena Haring & Rainer Niemann & Silke Rünger, 2016. "Investor Taxation, Firm Heterogeneity and Capital Structure Choice," CESifo Working Paper Series 6098, CESifo.
    15. Vassilis Rapanos, 2006. "Tax Incidence in a Model with Efficiency Wages and Unemployment," International Economic Journal, Taylor & Francis Journals, vol. 20(4), pages 477-494.
    16. Kul B. Bhatia, 2001. "Specific Inputs, Value-Added, and Production Linkages in Tax-Incidence Theory," Public Finance Review, , vol. 29(6), pages 461-486, November.
    17. Roger H. Gordon & Jeffrey K. MacKie-Mason, 1990. "Effects of the Tax Reform Act of 1986 on Corporate Financial Policy and Organizational Form," NBER Working Papers 3222, National Bureau of Economic Research, Inc.
    18. Don Fullerton & Garth Heutel, 2007. "Who bears the burden of a tax on carbon emissions in Japan?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(4), pages 255-270, December.
    19. James Alm & William H. Kaempfer, 2002. "Who Pays the Ticket Tax?," Public Finance Review, , vol. 30(1), pages 27-40, January.
    20. Gravelle, Jane G., 1995. "The Corporate Income Tax: Economic Issues and Policy Options," National Tax Journal, National Tax Association;National Tax Journal, vol. 48(2), pages 267-277, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:10:y:1982:i:3:p:283-303. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.