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Taxation of income and wealth in a model of endogenous growth

Author

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  • Grüner, Hans Peter
  • Heer, Burkhard

Abstract

This paper explores the effects of inheritance taxation and income taxation on the growth rate in an endogenous growth model with altruistic parents. Human capital is accumulated according to the Standard Lucas specification. The government raises taxes in order to finance a non-productive public good. The public good must be provided in a fixed proportion to output. Pure wealth taxation is proven to deliver a higher steady-state growth rate than any feasible mix of income and wealth taxation.

Suggested Citation

  • Grüner, Hans Peter & Heer, Burkhard, 1994. "Taxation of income and wealth in a model of endogenous growth," Discussion Papers, Series II 227, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    • Handle: RePEc:zbw:kondp2:227
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    Cited by:

    1. Grüner, Hans Peter, 1994. "Redistributive policy, inequality and growth," Discussion Papers, Series II 240, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    2. Hans Grüner, 1995. "Redistributive policy, inequality and growth," Journal of Economics, Springer, vol. 62(1), pages 1-23, February.
    3. Grüner, Hans Peter, 1995. "Political redistribution: The role of delegated lobbying and wage bargaining," Discussion Papers, Series II 272, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".

    More about this item

    Keywords

    Optimal Taxation; Endogenous Growth; Inheritance Taxation;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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