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The Taxation of Income from Capital: A Comparative Study of the U.S., U.K., Sweden and West Germany--Comparisons of Effective Tax Rates--

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  • Mervyn A. King
  • Don Fullerton

Abstract

This working paper presents Chapter 7 of a book to be published for the National Bureau of Economic Research by the University of Chicago Press. The point of the book is to compare taxes on income from capital in four countries,accounting for corporate, personal, and property taxes, and including national,regional, and local level taxes. We describe statutory tax rates and other tax rules in each country and calculate overall effective marginal tax ratesfor different combinations of asset, industry, source of finance, and ownership categories.This chapter compares effective tax rates in the four countries for different assets, industries, sources of finance, and ownership categories.Differences in overall effective tax rates among countries are attributed to differences in rates of inflation, actual depreciation,tax parameters, or differences in the amount of capital in each combination.For each country,we plot the effect of inflation on overall tax rates, and we plot the distribution of different effective tax rates at a given rate of inflation. We further investigate the sensitivity of results to assumptions about inflation and interest rates.

Suggested Citation

  • Mervyn A. King & Don Fullerton, 1983. "The Taxation of Income from Capital: A Comparative Study of the U.S., U.K., Sweden and West Germany--Comparisons of Effective Tax Rates--," NBER Working Papers 1073, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1073
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    References listed on IDEAS

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    1. Martin Feldstein & Lawrence Summers, 1983. "Inflation, Tax Rules, and the Long-term Interest Rate," NBER Chapters, in: Inflation, Tax Rules, and Capital Formation, pages 153-185, National Bureau of Economic Research, Inc.
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    1. Fuest, Clemens & Gründler, Klaus & Potrafke, Niklas & Ruthardt, Fabian, 2024. "Read my lips? Taxes and elections," Journal of Public Economics, Elsevier, vol. 236(C).
    2. Don Fullerton, 1983. "Which Effective Tax Rate?," NBER Working Papers 1123, National Bureau of Economic Research, Inc.
    3. Cummins, Jason G. & Hassett, Kevin A. & Hubbard, R. Glenn, 1996. "Tax reforms and investment: A cross-country comparison," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 237-273, October.
    4. Jason Cummins & R. Glenn Hubbard, 1995. "The Tax Sensitivity of Foreign Direct Investment: Evidence from Firm-Level Panel Data," NBER Chapters, in: The Effects of Taxation on Multinational Corporations, pages 123-152, National Bureau of Economic Research, Inc.
    5. Klenow, Peter J. & Rodriguez-Clare, Andres, 2005. "Externalities and Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 11, pages 817-861, Elsevier.
    6. Karl-Heinz Todter & Gerhard Ziebarth, 1999. "Price Stability versus Low Inflation in Germany: An Analysis of Costs and Benefits," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 47-94, National Bureau of Economic Research, Inc.
    7. Jüttemeier, Karl-Heinz, 1987. "Subsidizing the Federal German economy: Figures and facts, 1973-1984," Kiel Working Papers 279, Kiel Institute for the World Economy (IfW Kiel).

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