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Normative Aspect'S Of State-Contingent Capital Income Taxation

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  • Christiansen, Vidar

Abstract

State contingent and asset specific capital income taxes are studied within the framework of a two-period, two-asset and two-state model. Distortions of savings and choice of portfolio in the presence of uncertainty are discussed. Important properties of the taxes are exposed. Conditions for having no portfolio distortion at the tax optimum are established.

Suggested Citation

  • Christiansen, Vidar, 1990. "Normative Aspect'S Of State-Contingent Capital Income Taxation," Economic Research Papers 268378, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:268378
    DOI: 10.22004/ag.econ.268378
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    References listed on IDEAS

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    1. Sandmo, Agnar, 1989. "Differential taxation and the encouragement of risk-taking," Economics Letters, Elsevier, vol. 31(1), pages 55-59.
    2. Deaton, Angus, 1981. "Optimal Taxes and the Structure of Preferences," Econometrica, Econometric Society, vol. 49(5), pages 1245-1260, September.
    3. Sandmo, Agnar, 1969. "Capital Risk, Consumption, and Portfolio Choice," Econometrica, Econometric Society, vol. 37(4), pages 586-599, October.
    4. Joseph E. Stiglitz, 1982. "The Inefficiency of the Stock Market Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 241-261.
    5. J. E. Stiglitz, 1969. "The Effects of Income, Wealth, and Capital Gains Taxation on Risk-Taking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 263-283.
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