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International and Intergenerational Aspects of Capital Income Taxation in an Endogenously Growing World Economy

Author

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  • Yasushi Iwamoto

    (Faculty of Economics, University of Tokyo)

  • Akihisa Shibata

    (Kyoto Institute of Economic Research, Kyoto University)

Abstract

This paper discusses how capital income taxation affects economic growth and welfare in an endogenously growing world economy with perfect capital mobility and worldwide externalities. Worldwide ex-ternalities provide a mechanism for equalizing national growth rates even with different capital income tax rates. The welfare of future generations is more influenced by a change in the growth rate than by the international spillover effect which has been the primary concern of the previous studies. Moreover, our model finds intergenerational conflicts arising from the change in the growth rate caused by a change in the source tax rate of the foreign country.

Suggested Citation

  • Yasushi Iwamoto & Akihisa Shibata, 2007. "International and Intergenerational Aspects of Capital Income Taxation in an Endogenously Growing World Economy," CIRJE F-Series CIRJE-F-490, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:2007cf490
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    References listed on IDEAS

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    3. Daisuke Amano & Jun-ichi Itaya & Kazuo Mino, 2014. "Trade Structure and Growth Effects of Taxation in a Two-Country World," KIER Working Papers 891, Kyoto University, Institute of Economic Research.
    4. repec:hok:dpaper:273 is not listed on IDEAS
    5. Colin Davis & Ken‐ichi Hashimoto, 2018. "Corporate Tax Policy And Industry Location With Fully Endogenous Productivity Growth," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 1136-1148, April.

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